By Peter Nurse
Investing.com -- U.S. jobless claims data for April will inform the markets of the strength of the employment recovery as the stock sell-off continues. Disney’s outlook is in focus, while Elon Musk dumps bitcoin as a payment method for Tesla (NASDAQ:TSLA) cars. The conflict in Gaza escalates, while Colonial Pipeline slowly restarts its key pipeline. Here's what's moving markets on Thursday, May 13th.
1. Jobless claims loom into focus
The attention turns back to the jobs market Thursday, after Wednesday’s inflation shock, with the weekly jobless claims due at 8:30 AM ET (1230 GMT).
The market will carefully study this figure after last week’s disappointing jobs report for April and record job opening numbers earlier this week, with expectations running at 490,000 for initial claims, below 500,000 for the second straight week, and 3.6 million for continuing claims.
Weekly jobless claims have nearly halved since the start of 2021, helped by the ramped-up vaccination program and widespread easing of social distancing restrictions across many states.
Federal Reserve officials have made it clear that the employment picture will have to pick up substantially before they change monetary policy.
Also of interest will be the release of factory gate price data for April, at the same time, particularly after the consumer price index surged on Wednesday to its highest rate since the eve of the 2008 financial crisis in April.
The annual PPI figure is expected to rise to 5.9% from 4.2% the previous month.
2. Stocks set to open lower; Disney outlook in focus
U.S. stocks are set to open lower again Thursday, adding to Wednesday’s sharp losses after the substantial jump in consumer prices prompted concerns that rampant inflation could force the Federal Reserve’s hand earlier than currently guided.
By 5:50 AM ET, Dow Jones futures were down 150 points, or 0.5%, at just over 33,500, while S&P 500 futures were down 0.3% and Nasdaq 100 futures were down 0.2%.
On Wednesday, the Dow Jones Industrial Average fell 681 points, or 2%, its weakest day since January, the S&P 500 lost 2.1%, its biggest one-day drop since February, while the tech-heavy Nasdaq Composite slid 2.6%.
Stocks likely to be in focus later include Disney (NYSE:DIS), which reports earnings after the bell, although investors will be looking more for what the entertainment giant says about the rest of the year now that Disneyland has reopened and tourists are traveling again.
Airbnb (NASDAQ:ABNB) is seen reporting a loss of $1.06 a share on revenue of $718 million, hopefully putting the pandemic behind it, while Sonos (NASDAQ:SONO) traded 11% higher premarket after the premium speaker maker raised its full-year outlook after strong second-quarter revenues.
3. Musk rejects Bitcoin as payment for Tesla cars
(Bitcoin), the world’s biggest digital currency, sold off sharply Thursday after seemingly losing the unconditional support of one of its most high-profile backers.
Tesla CEO Elon Musk said, in a tweet, that the electric-vehicle manufacturer is suspending the use of the cryptocurrency as a method to purchase its vehicles, citing concerns about the impact on the environment from bitcoin mining.
The digital currency was last seen over 13% lower at $49,494, recovering slightly after it had fallen to its lowest level since the beginning of March. Despite the recent pullback, bitcoin is still up over 400% in the last 12 months.
Musk has been a big proponent of digital currencies, including bitcoin and Dogecoin. In February, Tesla (NASDAQ:TSLA) announced it had purchased $1.5 billion in bitcoin and planned to accept it as a payment, a move which had added considerable legitimacy to the cryptocurrency.
4. Gaza tensions ramp up
British Airways cancelled its flights to and from Tel Aviv on Thursday, following the lead of the major American airlines in avoiding flying to Israel amid an escalating conflict.
Israel prepared ground troops along the Gaza border on Thursday, a move that would recall similar incursions during Israel-Gaza wars in 2008-2009 and 2014, and Hamas launched rocket barrages at Israel during the region's fiercest hostilities in years.
Amid fears the violence could spiral further out of control, Washington planned to send an envoy, Hady Amr, for talks with Israel and Palestinians.
5. Colonial restarts pumping; crude prices weaken
Colonial Pipeline began to slowly restart the nation's largest fuel pipeline network late Wednesday after a ransomware attack shut the line late last week, but it will still take several days for normal operations to resume.
Meanwhile, the shutdown has hit large parts of the U.S. Southeast. Nearly 60% of gas stations in metro Atlanta were without gasoline, tracking firm GasBuddy said. Its survey showed 65% of stations in North Carolina and 43% in Georgia and South Carolina without fuel.
The Biden administration, as a result, temporarily eased U.S. shipping requirements to allow foreign tankers to transport gasoline and diesel to the hard hit areas of the country. It had already relaxed rules on fuel being transported by road.
Crude oil prices weakened Thursday, not helped by the Energy Information Administration reporting a smaller than expected draw in U.S. inventories of 427,000 barrels for the week ending May 7. By 6:30 AM ET, U.S. crude was down 1.7% at $64.97 a barrel, while Brent was down 1.6% at $68.22.
However, these losses may not last long, as the International Energy Agency stated, in its monthly report released Wednesday, that the demand for crude is now outpacing supply.
IEA’s report comes a day after the Organization of the Petroleum Exporting Countries said that it continued to expect a strong fuel demand recovery in 2021 as China and the U.S. continue their economic recoveries from the Covid-19 pandemic.