Stocks Move Higher As Debt Worries Evaporate

The Stock Market Is Ready To Continue Its Rebound

S&P 500 futures are moving higher as traders feel relief from Republicans’ proposal for a temporary deal which is meant to avoid a federal debt default. This proposal will provide lawmakers with some time to reach an ultimate solution.

While it’s hard to believe that U.S. could default on its debt, we still saw a relief rally which continues today. However, it should be noted that Treasury yields have started to move higher, which means that traders remain worried about inflation.

Meanwhile, the U.S. dollar is trading not far from yearly highs which puts some pressure on precious metals, although gold remains in the tight $1750 – $1765 range.

Initial Jobless Claims Declined To 326,000

The U.S. has just released Initial Jobless Claims and Continuing Jobless Claims reprots. Initial Jobless Claims report indicated that 326,000 Americans filed for unemployment benefits in a week. Analysts expect that Initial Jobless Claims would total 348,000. Continuing Jobless Claims declined from 2.81 million (revised from 2.8 million) to 2.71 million.

Recent employment reports indicate that the situation in the job market continues to improve. However, many traders will wait for the Non Farm Payrolls report, which will be released tomorrow, before making final conclusions. Meanwhile, the market will likely stay strong as traders cheer the temporary solution for the debt problem.

WTI Oil Tries To Rebound After Sell-Off

WTI oil has recently made an attempt to settle below the $75 level but lost momentum and rebounded towards the $77 level.

Yesterday, EIA Weekly Petroleum Status Report indicated that crude inventories increased by 2.3 million compared to analyst consensus which called for a decline of 0.4 million. U.S. domestic oil production increased from 11.1 million barrels per day (bpd) to 11.3 million bpd, which served as an additional bearish catalyst for oil.

While oil suffered a pullback, stock traders remain optimistic, and energy-related stocks are gaining some ground in premarket trading.

For a look at all of today’s economic events, check out our economic calendar.