Inventory futures rebound as traders await extra job knowledge

Futures contracts pegged to major US stock indices were slightly higher Thursday morning as Wall Street appeared to be improving after a mixed week.

Dow futures rose 69 points, or 0.2%. S&P 500 futures and Nasdaq 100 futures also gained about 0.2%.

Movements in the futures markets came after a mostly lower regular session on Wednesday.

The Dow Jones Industrial Average lost 323.73 points, or 0.9%, to close near its daily low at 34,792.67. The S&P 500 lost about 0.5% to close at 4,402.66 while the Nasdaq Composite rose 0.1% to 14,780.53.

Initial weekly jobless claims reached 385,000 on Thursday, which was in line with expectations. Recent income and economic data has been strong overall, but some economists fear economic growth and employment gains will slow down from here.

The unemployment claims data were the last readings ahead of the top July job report released on Friday morning. There is a wide range of estimates from economists and what the report will show, and some employment growth metrics have disappointed despite the high number of job openings reported.

“Many factors are likely to be responsible for the labor shortage; Concerns about contagion with the virus, childcare obligations, skill conflicts and generous unemployment insurance benefits, “PNC senior economist Abbey Omodunbi said in an email. In the second half of the year, “increased competition for labor, particularly in the leisure and hospitality sectors, will help accelerate wage growth and boost household incomes and consumer spending”.

The results of a private ADP payroll study released Wednesday showed a 330,000 job gain for July, well below the consensus estimate of 653,000. The Department of Labor’s official job report, which usually has more of an impact on investors, will be released on Friday. Economists estimate the report will show 845,000 additional non-farm employment figures in the US by July, according to estimates by Dow Jones, about the same as in the previous month.

The 10-year government bond yield was trading a modest 1.17% on Thursday. The yield fell just below 1.13% on Wednesday before rebounding in late morning trade.

The shares of Roku and Uber fell after each published quarterly results. Etsy fell 12% in pre-hours trading after the company released a forecast for the current quarter suggesting the pandemic-sparked trading boom may be coming to an end. Uber was 3% behind in pre-trading.

However, the earnings season was strong overall. Goldman Sachs raised its year-end target for the S&P 500 to 4,700, up 7%, partly due to the improving earnings outlook.

Robinhood’s shares rose 50% during Wednesday’s regular trading and continued a volatile rise after last week’s weak IPO. Semiconductor stocks were another bright spot, with Nvidia and Advanced Micro Devices rising.

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