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Day Ahead: 3 Things to Watch for August 13

imageStock Markets9 hours ago (Aug 12, 2020 04:13PM ET)

(C) Reuters.

By Liz Moyer — U.S. stocks flirted with new highs on Wednesday, fueled by a renewed surge in big tech and signs that inflation is gaining momentum as the economy recovers from a record-breaking slump.

The S&P 500 got within a few points of its February high, which it reached before the pandemic forced the economy to shut down. The Dow Jones Industrial Average and NASDAQ Compositealso notched triple digit point gains.

Still, there is a stalemate in Washington as neither side of the political aisle could strike a compromise on the latest round of economic stimulus, something several economists have said is needed to help sustain the recovery.

Crude Oil WTI Futures prices jumped after an unexpectedly large drop in crude inventory last week eased concerns about the fragile demand for gasoline and other energy products.

Fresh data on employment trends is expected on Thursday ahead of retail sales and other economic data on Friday.

Here are three things that could affect the markets tomorrow:

1. A fresh round of jobs data

The government is expected to release last week’s initial unemployment claims at 8:30 AM ET (1230 GMT). The number is expected to show slight improvement from the week earlier, at 1.12 million filings, compared to 1.18 million. Still the trend continues to be over 1 million claims, dating all the way back to March, when businesses shut down to slow the spread of Covid-19.

Continuing jobless claims are also expected to be released at 8:30 AM ET, and the number is forecast to decline but remain in high. Analysts polled by foresee 15.9 million claims, down from 16.1 million the previous week.

2. Another week for big IPOs

There are several stock debuts lined up this week, even as analysts question the valuations of technology startups.

A closely watched deal is the IPO of Duck Creek Technologies, which said Wednesday it was raising its price target to $23 to $25 a share from $19 to $21 prior.

Duck Creek provides software-as-a-service for insurance companies like American International Group Inc (NYSE:AIG), according to Seeking Alpha. The new pricing means Duck Creek could raise $360 million in the 15 million share offering, reaching a company valuation of $3.2 billion, not including the underwriter’s option.

After the offering, the private equity firm Apex will hold a 34% stake, Seeking Alpha said. Accenture plc (NYSE:ACN) will hold 23%.

3. A window on how coronavirus is affecting small businesses

Cisco Systems Inc (NASDAQ:CSCO) shares fell 3.7% in after-market trading after reporting earnings of 80 cents a share versus the 74-cent EPS forecast. Revenue of $12.15 billion also beat expectations of $12.09 billion. It’s the first big tech name to report a quarter that includes July, when much of the business world had emerged from coronavirus lockdowns.

Analysts see Cisco as a crucial proxy for business spending on information technology. Work-from-home mandates have benefited companies like Cisco that offer cloud data centers and video conferencing services. Raymond James analyst Simon Leopold said large enterprise sales have improved at Cisco but business from small- and medium-sized outfits showed weakness, according to MarketWatch.

Day Ahead: 3 Things to Watch for August 13

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