Here are the key news, trends, and analysis investors need to start their trading day:
1. Dow jumps after four days of bad luck
Traders operate on the floor of the New York Stock Exchange (NYSE) on September 21, 2021.
Brendan McDermid | Reuters
Dow futures rose more than 200 points Thursday, a day past the 30-stock average, and the broader S&P 500 broke four session losing streaks. The Nasdaq rose for the second day in a row. All three stock benchmarks gained 1% as investors left the troubles of China’s real estate giant China Evergrande Group and took comfort in the signal from the Federal Reserve that it had no immediate intentions to undo US monetary stimulus measures. Wednesday’s gains have dampened Monday’s slump and September decline, which has historically been a difficult month on Wall Street. The Dow was nearly 4% below its record high last month. The S&P 500 and Nasdaq were about 3% below their last record highs earlier this month.
2. China is preparing for the possible demise of Evergrande, WSJ says
Apartment buildings in the Life in Venice real estate and tourism development project of the China Evergrande Group in Qidong, Jiangsu province, China, on Tuesday September 21, 2021.
Qilai Shen | Bloomberg | Getty Images
Chinese authorities have directed local officials to prepare for a possible collapse of heavily indebted Evergrande, the Wall Street Journal reported Thursday. Local officials described the signals from Chinese authorities as “preparing for the possible storm,” saying the government had told them to intervene at the last minute to prevent spill-over effects from Evergrande’s demise, the Journal said. The big developer made a payment for a local bond on Wednesday. However, it is unclear whether the company will pay interest due on its offshore bonds on Thursday.
3. Initial jobless claims increase instead of decrease as expected
A career fair in Louisville, Kentucky on June 23, 2021.
Luke Sharrett / Bloomberg via Getty Images
The US government’s weekly look at initial jobless claims rose unexpectedly to 351,000. Economists had expected new applications to drop to 320,000 for the week ending September 18 – near the lows of the Covid pandemic. The previous week was revised up to 335,000.
After its two-day meeting in September, the Fed released its quarterly economic forecast on Wednesday. Officials expect the country’s unemployment rate to fall from its current 5.2% to 4.8% this year. The June estimate was for a year-end rate of 4.5%.
4. Fed lowered its forecast for economic growth and raised its inflation outlook
The building of the Marriner S. Eccles Federal Reserve stands in Washington, DC, USA on Tuesday, August 18, 2020.
Erin Scott | Bloomberg via Getty Images
The Fed’s forecasts also lowered the US growth figures, raised inflation expectations and raised the timing for a rate hike. The Federal Open Market Committee now expects that gross domestic product will only increase by 5.9% this year. Core inflation is expected to rise 3.7% this year. Against this background, the Fed left key interest rates unchanged near zero on Wednesday afternoon. But most members are now seeing the first rate hike in 2022. The Fed did not provide a schedule for curbing its bond purchases. However, Fed Chairman Jerome Powell said during his post-meeting press conference that if the recovery stays on track, “a gradual wind-down process that will be completed around the middle of next year is likely appropriate”.
5. CDC Votes Pfizer Covid Booster for Older, At-Risk Americans
A nurse intervenes at a pop-up vaccine clinic in the Arleta neighborhood of Los Angeles, Calif., On Jan.
Robyn Beck | AFP | Getty Images
The CDC can vote Thursday on the FDA’s decision to approve a Pfizer Covid booster vaccination for people 65 and older, as well as other at-risk Americans, six months after completing their first two doses. If the CDC agrees, the booster shots for these groups could begin immediately. But that wouldn’t go as far as the Biden administration is already offering boosters to the general public this week.
– CNBC’s Jesse Pound contributed to this report. Follow all market activity like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.