The Nasdaq Composite leads U.S. stocks higher as the U.S. dollar weakens
- European markets are mostly higher in midday trading as the European Central Bank (ECB) pledges to increase the pace of bond purchases.
- Asian markets surged overnight with China outperforming.
Jobless claims continue their modest decline
Applications for U.S. jobless claims fell more than expected last week to the lowest since early November 2020.
- 712,000 Americans filed for unemployment insurance versus Bloomberg consensus forecasts calling for 725,000.
- Continuing claims fell to 4.1 million, also below the Bloomberg consensus forecast of 4.2 million.
OECD raises global growth forecasts; U.S. rebound continues to surpass expectations
- The OECD (Organisation for Economic Co-operation and Development) raised its 2021 gross domestic product (GDP) growth forecast for the United States by more than 3 percentage points to a very strong 6.5%.
- Our 5-5.5% forecast for U.S. GDP growth in 2021 may prove conservative.
- The OECD raised its global GDP forecast by 1.4 percentage points to 5.6%.
- Euro area GDP, which saw a much more modest increase (+0.3%) due to ongoing COVID-19 restrictions and slow vaccine distribution, is only expected to grow 3.9%.
- China’s forecast was little changed at a very strong 7.8%, while India’s forecast (12.6%) saw the biggest increase among major countries at 4.7 percentage points.
- The reopening of the U.S. economy continues to surpass expectations, giving global growth a boost and providing a favorable backdrop for global equity markets.
- Read more about OED forecasts in today’s LPL Research blog, available at 12pm ET.
Technical update
Intermediate trends reemerged on Wednesday, as energy and financials led the S&P 500 Index to a 0.6% gain. The Russell 2000 and Dow outperformed, while technology, the only sector in the red, dragged the Nasdaq to a slight loss on the day. First tactical support for the Nasdaq is marked by the Friday intraday low at 12,397.
COVID-19 news
The U.S. reported 58,000 new COVID-19 cases on Wednesday (source: Our World In Data).
- 61% of the U.S. population over the age of 65 have been fully vaccinated.
- Exactly one year ago, the World Health Organization (WHO) declared the COVID-19 outbreak a pandemic.
Rising Rates And Stock Market Performance
LPL Research discussed the market signals supporting the potential for stock gains in the current rising rate environment. Read this week’s Weekly Market Commentary.
Why Higher Rates Aren’t Bad For Stocks
In this week’s Market Signals podcast and video, Chief Market Strategist Ryan Detrick and Equity Strategist Jeffrey Buchbinder discussed why higher rates historically haven’t been bearish for stocks and why they don’t think they will be this time either.
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