Futures point to gains
Wall Street futures drifted higher on Friday morning, amid positive signs that the U.S. economy is making huge strides in its recovery from the Covid-19 pandemic.
A report released by the U.S. Labor Department on Thursday showed applications for unemployment benefits fell last week to a fresh pandemic low. The department said initial jobless claims for the week ended May 21 dropped 406,000 from the prior week’s 444,000.
A separate report published by the Commerce Department also showed that the U.S. economy grew at a 6.4% annual rate in the first quarter.
By 5:40 a.m. ET, Dow futures rallied 183.5 points, or 0.53% to 34,620.5. S&P 500 futures gained 16.12 points, or 0.38% to 4,215.12 while the tech-heavy Nasdaq 100 futures rose 45.25 points, or 0.33% to 13,710.75.
Biden set to propose $6 trillion budget
Meanwhile, President Joe Biden is expected to propose a $6 trillion spending package when he unveils his first budget later today, the New York Times reported on Thursday.
Documents obtained by newspaper show Biden will propose record federal spending of $6 trillion for the 2022 fiscal year, starting in October, rising to $8.2 trillion by 2031. The report said the president planned to pay for his budget by hiking taxes on wealthy Americans and corporations.
Biden’s proposal will also reveal for the first time how his administration believes economic growth, inflation, and employment would be affected by implementing his agenda.
Republican lawmakers are already are criticizing the proposal. In an interview on Bloomberg Television Senator Mike Braun of Indiana said the plan is “unbelievable” and “crazy.”
But Treasury Secretary Janet Yellen has welcomed Biden’s plans saying, “It will have a temporary period of spending and permanent increases that beyond the budget window will result in lower deficits and more tax revenue to support those expenditures.”
Crude futures rise ahead of OPEC meeting
In energy markets, crude futures soared early Friday as OPEC and its allies prepare to meet on June 1 via videoconference.
Analysts expect OPEC and its allies including Russia, a group known as OPEC+, to stick to the gradual easing of oil production curbs at the meeting, pinning hopes on a robust recovery in global oil demand.
Oil has extended its 2021 gains since the group decided to ease supply cuts by 2.1 million barrels per day in April.
As of writing, U.S. West Texas Intermediate (WTI) crude futures were up 35 cents, or 0.52% to $67.20 a barrel. Global Brent crude futures rose 30 cents, or 0.43% to $69.50 a barrel.
