Wall St. set for green open after consecutive daily declines

Summary:

• US indices trading higher ahead of the open

• US500 found support around 3090

• Initial jobless claims rises; Philly Fed beats

US stocks are looking to end a two-day losing streak this afternoon after the major benchmarks closed lower on both Tuesday and Wednesday. Ahead of the cash open the indices are looking to recover however, with all 3 major benchmarks and the small-cap index trading in the green. The recovery this morning was no doubt aided by positive noises on the trade front, with reports that China has invited US negotiators for more talks, and while it seems like we’re just getting a rinse and repeat of the same news flow, it does clearly continue to impact the markets.

Recent dips into 3090 have been bought in the S&P500 and the market has managed to maintain its incredible run of closes above the 10 day EMA. It is now 30 consecutive sessions that have ended above the 10 day EMA (Yellow line). Will today make it 31? Source: xStation    

There has been a notable rise in the weekly initial jobless claims in the latest release, with the data coming in at 227k vs 218k expected. After last week’s reading was revised higher by 2k to now read 227k also, there are some signs that this could be the start of a trend. Before the last fortnight the last reading this high was back in June and even though it remains low by historical standards it is a sizable pick-up and something to keep an eye on going forward. 

At the same time as the jobless claims data hit there was some better news also out with the Philly Fed manufacturing index rising to 10.4 from 5.6 prior, against a consensus forecast of 7.0. This is the 4th time in the past 5 months that this metric has topped estimates and supports the notion of a bounce back in manufacturing activity in the second half of the year.