Stock Futures Unchanged Ahead of Key Unemployment Report

06 Aug 2021 · 3rd Party Analysis

Stock Futures Unchanged Ahead of Key Unemployment Report

WRITTEN BY ThorFX

In Summary

  • US futures hover around the flatline as investors expect the July jobs report today
  • Thursday trading lifted the S&P500 and the Nasdaq Composite to new record highs

US equity index futures were steady near the flatline in pre-market trading on Friday, ahead of the highly anticipated July jobs report. Futures contracts tied to the major stock averages, the Dow Jones, the S&P500, and the Nasdaq Composite, are little changed, hovering right under their Thursday closing levels.

While US futures keep steady, investors anticipate the latest July jobs number, set for release one hour before the opening bell in New York.

Stocks across the board finished Thursday’s session with new all-time highs for the S&P500 and the Nasdaq Composite. The 30-stock Dow Jones ended the day roughly 0.2% away from its latest closing high.

The broad-based S&P500 had 9 of its 11 sectors rally to higher grounds, with only the healthcare and materials sectors finishing lower. The solid performance for the benchmark index was boosted by a continuation of strong earnings for the second quarter, mixed with upbeat economic data. The S&P500 added 26.44 points, or 0.60%, to a record close of 4,429.10.

The Nasdaq Composite surged nearly 0.80%, or 114.58 points, to close at 14.895.12. The technology-centered index was buoyed by tech giants such as Microsoft, up over 1%, Netflix, up nearly 1.5%, and Facebook, up 1.1% on the day.

A Marked Decline in Jobless Claims

The Dow Jones Industrial Average added 271.58 points, or 0.78%, almost erasing its 320-point loss from the previous day. The blue-chip stock average ended the day at 35,064.25. A day earlier, the 30-stock benchmark declined heavily on elevated concerns the economy may be slowing down, pressured by a rapid rise of new Covid-19 cases.

In another sign of a healing economy, the US Labor Department reported a slight decline in jobless claims for the previous week. Filings for unemployment benefits dropped to 385,000. The four-week moving average decreased to 394,000.

Jobless claims have been floating between 360,000 to 420,000 since late May, marking a stable decline from earlier in the pandemic. In contrast, current jobless claims levels remain way above the 2019 weekly average of 218,000 just before the pandemic arrived.

The relatively stable level of filings for unemployment benefits in recent months, according to analysts, indicates a continued weakness in the labor market. On that note, the Federal Reserve may be prompted to hold off on scaling back its ultra-loose monetary policies until the job market recovers more firmly.

To get a glimpse into the recovering labor market in the world’s largest economy, the US Labor Department today will release its latest nonfarm payrolls report. Economists polled by Bloomberg expect the US economy will have added 870,000 new jobs in July, up from June’s solid 850,000 figure. The jobless rate, currently sitting at 5.9% for June, is predicted to dip further to 5.7% in July.

In Europe, stocks today hover right at the flatline with the Stoxx 600 Europe virtually unchanged, sitting at its all-time record at the 470-mark.

In cryptocurrency action, Bitcoin is trading rather unchanged, currently gravitating toward the $41,000 level. The leading digital coin has been floating sideways throughout the week with a Monday-to-date performance of less than 1% to the downside.

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