US Stock Futures Modestly Higher Ahead of May’s Jobs Report

04 Jun 2021 · 3rd Party Analysis

US Stock Futures Modestly Higher Ahead of May’s Jobs Report

WRITTEN BY ThorFX

In Summary

  • Futures are positive in pre-market trading on Friday as the market awaits NFP data
  • AMC stock slides 18% after company announces it had completed its stock offering

US equity futures in pre-market hours on Friday are trading little changed ahead of the jobs report for May. After a disappointing session on Thursday, Dow futures are essentially flat, while S&P futures and Nasdaq futures are marginally higher, each up roughly 0.1%. Investor focus today will be on the Labor Department’s release of May’s payroll data one hour before the opening bell in New York.

Economists surveyed by Dow Jones expect the figure to land at 671,000 jobs added to the labor market in May, a significant upgrade from April’s weak number of 266,000. The estimate, however, could be a miss if employers have been acting with caution against the backdrop of looming inflation. In addition, the wage component could have played a role in hiring due to the increasing talk of workers demanding higher pay by companies. By comparison, economists expected nearly 1 million new jobs for April.

Still, the May jobs data will be a crucial indicator in determining where the US economy stands on the way to recovery from the pandemic hit. The report will serve as guidance for the Federal Reserve which currently supports the economy with $120bn of bond purchases per month. If the jobs report delivers a relatively high number, it could mean that the US central bank may soon begin to start talking about tapering its asset purchases. On the other hand, a weak jobs report for May could prompt the Fed to continue its monetary policy at least until the end of the year.

Tech Stock Experience Losses

The major stock averages on Thursday closed lower led by a drop in the technology sector. The Dow Jones Industrial Average slid 0.07%, or 23.34 points, to end a five-day winning streak and close the session at 34,577.04. The S&P500 declined 0.36%, or 15.27 points, to 4,192.85. The tech-focused Nasdaq Composite lost 1.03%, or 141.82 points, and finished at 13,614.51.

Technology stocks that were preferred during the pandemic times were heavily offered yesterday, which led to some steep losses in high-flying tech names. Tesla dropped 5.33%, or $32.38, to $572.84. Netflix was down almost 2%, while Apple, Facebook, and Google declined roughly 1% apiece. Amazon lost 1.45% to $3,187.01.

Meme-stocks suffered a solid blow to their share price. The wild swings in trading for retail favorites continued this time to the downside. AMC Entertainment tanked almost 18% after the company announced it intended to start selling 11.5 million shares “from time to time” to raise capital to cover its operations. A few hours later, however, the movie theater operator said it sold 11.55 million shares at an average price of $50.85 a share, raising $587.4mn in additional capital.

AMC stock declined 17.92%, or $11.21, to end trading at $51.34 a share. GameStop also finished lower yesterday, down 8.52%, or $24.06, to $258.18. BlackBerry inched higher, up a little over 4% to $15.88 a share. AMC shares remain pressured in pre-market trading, down around 8%. GameStop is slightly lower in after-hours trading, while BlackBerry is positive by a little over 1%.

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