US index futures jumped on Thursday, continuing the return observed on Wednesday in the second half of the North American session. The recovery of the indices comes amid rumors that the US Congress is close to a deal that could raise the debt limit in the short term, which will prevent a catastrophic default on obligations. Dow Jones Industrial Average futures rose 303 points or 0.9%. S&P 500 futures were up 0.97% and Nasdaq 100 futures were up 1.2%.
Back this Tuesday, US Treasury Secretary Janet Yellen again warned Congress that if there is no compromise, the country will plunge into a deep recession, which will lead to an unprecedented government default. Already yesterday, Senate minority leader Mitch McConnell put forward to Democrats several conditions under which Republicans would agree to a deal that could raise the debt ceiling by a certain amount and allow the government to continue working until December of this year. If a temporary agreement is reached, all this will cool down the volatility of the markets in the near future, which has grown significantly due to several problems related to public debt and inflation. Some experts note that despite the relatively high probability of reaching a temporary agreement, this will only delay a potential catastrophe. However, it will not solve the problem in any way - a small positive for the market as a whole.
It is unlikely that such a decision will be a growth driver for the markets in the near future. Most likely, it will simply be possible to protect the current levels at which key stock indices are traded. Data from the Labor Department on weekly applications for unemployment benefits in the United States supported the markets. The report says that applications for the week ending October 2 amounted to 326,000, lower than economists' forecast of 345,000.
October will continue to be an unstable month due to uncertainty regarding US fiscal and monetary policy and possible further disruptions in supply chains. Another problem is inflation, as many economic data indicate that the economy has already begun to recover from the crisis caused by problems with the next strain of Delta coronavirus. It is expected that the markets may stabilize slightly by the beginning of the reporting season for the third quarter, which will begin next week.
Now let's quickly run through the premarket and see which stocks moved the most volatile:
Twitter shares rose 2.4% in the premarket after announcing the sale of its mobile advertising unit MoPub to the manufacturer of app development tools AppLovin for $ 1.05 billion. Twitter acquired MoPub in 2013 for about $ 350 million.
In the media industry, Meredith Corp. agreed to purchase Dotdash, the digital media division of IAC/InterActiveCorp, for approximately $ 2.7 billion in cash or $ 42.18 per share. The combined company will be called Dotdash Meredith and include popular Meredith magazines such as People and Better Homes & Gardens. Earlier this year, Meredith agreed to sell its TV channels to Gray Television for $ 2.83 billion. Meredith securities on the premarket increased by 6.4% on the premarket.
Aspen Technology and Emerson Electric are in merger talks. The first offers its own software business, and the second produces industrial software. Aspen shares rose 13.1% on the premarket.
Rocket Labs USA is also noted as a growth leader. Its shares rose 9% in the premarket after winning a contract with NASA to launch an experimental solar sail into space.
As for the technical picture of the S&P500.
The fact of a return to the upper boundary of the side channel in the area of $ 4,394 indicates a real recovery after a strong volatile week. However, tomorrow, we are waiting for data from the US Department of Labor on the number of people employed in the non-agricultural sector, which may again fairly batter the markets if the indicator turns out to be better than economists' forecasts. If buyers manage to catch the $ 4,394 level, we can count on a more active recovery to the $4,478 area. If the pressure on the trading instrument returns today, the intermediate support is now seen at around $ 4,344. The lower boundary of the side channel remains in the area of $ 4,288.