U.S. Stocks Set To Open Higher As China Export Data Is Better Than Expected

U.S. Initial Jobless Claims Report Is Worse Than Expected

U.S. has just released its new Initial Jobless Claims report which showed that 3.2 million of Americans filed for unemployment benefits in a week compared to analyst consensus which called for 3 million of such applications.

Continuing Jobless Claims were much higher than expected and showed that 22.6 million of Americans were still unemployed. Analysts expected that Continuing Jobless Claims will be less than 20 million.

It should be noted that Continuing Jobless Claims data lags Initial Jobless Claims data by one week, so it is highly likely that the situation on the Continuing Jobless Claims front has deteriorated even more.

S&P 500 futures are still pointing to a higher open but they gave up some of the premarket gains due to the disappointing employment data.

Export Data From China Supports Markets

China Exports data showed that exports increased last month, and this unexpected development provided a boost to global markets.

It remains to be seen whether the upside trend in China exports will be robust as the country’s clients were heavily hit by the coronavirus pandemic.

However, both Europe and U.S. are starting to reopen their economies so the situation should get better in May.

I’d note that the markets eagerly rise on anything that can be counted as good news which highlights the underlying bullishness which is most likely caused by unprecedented stimulus measures from governments and central banks.

Oil Continues Its Upside Move

Oil is back into the green zone following yesterday’s pullback as the above-mentioned data from China and production cuts fuel oil traders’ risk appetite.

Oil-related companies are an important part of the market so upside in oil helps S&P 500 gain more ground. The spread between the front-month WTI contract and longer-dated contracts continues to narrow which indicates that the oil market is gradually stabilizing.

Additional upside on the oil price front may provide more support for the general market and push it closer to recent highs. So far, the poor economic data was not able to hurt the current market rebound, and this trend looks set to be continued today.