US stocks are setting up for a higher open on Thursday ahead of the US unemployment report for June that will offer investors a major clue on the timing of any Federal Reserve rate hike.
The major averages bounced back from losses at the start of the week on Wednesday despite ongoing concerns over the crisis in Greece, though markets closed off their highs with energy stocks a drag. In a shock change to the recent trend, US Oil inventories rose for the first time in nine weeks despite the typically high-demand summer driving season.
The rally in crude oil prices from the mid-March has done much for energy shares which were the second worst-performers in the second quarter. Crude oil prices appear to have ended their run higher which could see energy act as an even bigger drag on stock markets in the next month.
In the second quarter, healthcare stocks were top performers driven by a strong demand for biotech stocks and some M&A within the sector. Technology stocks have been relatively flat with Apple shares (NASDAQ:AAPL) trading sideways ahead of reports on Apple Watch sales. The worst performing sector was utilities, an interest-rate sensitive sector that has suffered because of expectations for a rate-hike.
Non-farm payrolls are expected to show 231k jobs were created in June. Markets are already jittery after Monday’s declines so anything near the 280k seen last month could send US stocks lower. A high number that implies a rate hike as early as September could be used by investors as a chance to lighten up exposure to equities before the Greek vote during the long US holiday weekend. Average hourly earnings expected to rise 0.2%, down from 0.3%, the result will be important for the inflation outlook.
Futures suggest the:
S&P 500 will open 3 points higher at 2,080 with the
Dow 30 expected to open 20 points higher at 17,777 and the
Nasdaq 100 7 points higher at 4,436.
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