Wall Street expected to rebound despite fading hopes for more US stimulus

US markets are expected to rebound this afternoon despite misgivings about the US economy. The Dow Jones Industrial Average is tipped to open at around 26,837, up 74 points. The S&P 500 is expected to rise 7 points to 3,237 while the NASDAQ Composite, which was the hardest hit of the indices yesterday, is seen rallying to 10,829, up almost 200 points. The rally is expected even as traders grow tired of waiting for another slug of stimulus to be added to the economic punch bowl. Goldman Sachs has halved its growth forecasts for US economic growth in the fourth quarter to 3% from 6% in recognition that Congress is unlikely to attach additional fiscal stimulus to the continuing resolution. “This implies that after a final round of extra unemployment benefits that is currently being disbursed, any further fiscal support will likely have to wait until 2021,” Goldman’s runes readers said. “An agreement between the Democrats and Republicans is not in sight, and investors are slowly giving up hope that a major stimulus package will be passed ahead of the presidential election in November,” said Milan Cutkovic, a market analyst at AxiCorp. “Darden Restaurants will be in play today as the company will post its first-quarter results,” said CMC Markets’ David Madden. “The hospitality sector has been hit hard by the pandemic. Even though the group saw a colossal rise in takeaways amid the lockdowns, revenue in the fourth quarter still fell by over 40%. Traders will be listening out for commentary in relation to costs –they have typically increased because of health and safety. EPS for the first quarter are expected to be 4 cents,” Madden said. Five things to watch for on Thursday: US jobless claims data for the week ending September 19 will likely be the key macro data for Thursday and will likely be aiming to notch a fourth consecutive week of initial jobless claims below 1mln, and lower than the prior week’s figure of 860,000. However, the figure still remains high, suggesting that the recovery of the US labor market is sluggish Fed chair Jerome Powell will also be continuing his testimony to the Financial Services Committee of the US House of Representatives, today focusing particularly on the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the previous US economic stimulus bill to support the country during the pandemic Further share price reaction from casino and racetrack operator Penn National Gaming Inc (NASDAQ:PENN) after the firm announced plans for a public offering of 14 million shares Investor response at the open to a fourth quarter earnings miss from professional services group Accenture PLC (NYSE:ACN) Ongoing political fallout following Donald Trump’s comments regarding a peaceful transfer of power following November’s election, saying on Wednesday that he will need to “see what happens” following the vote