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U.S. stock futures cautious ahead of nonfarm payrolls

Published 04/08/2017, 12:05
Updated 04/08/2017, 12:15
© Reuters.  Wall Street futures trade flat ahead of jobs report
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Investing.com – Wall Street futures pointed to a flat to higher open on Friday while investors waited for the U.S. monthly employment report and slight gains suggested that the Dow could be on track to log its eighth straight record close.

The blue-chip Dow futures added 41 points, or 0.18%, at 7:01AM ET (11:01GMT), the S&P 500 futures inched up 2 points, or 0.09%, while the tech-heavy Nasdaq 100 futures gained 6 points, or 0.11%.

The U.S. Labor Department will release its July nonfarm payrolls (NFP) report at 8:30AM ET (12:30GMT) on Friday.

The consensus forecast is that the data will show jobs growth of 183,000 this month, following an increase of 222,000 in June, with the unemployment rate forecast to dip to 4.3% from 4.4%.

Most of the focus will likely be on average hourly earnings figures, which are expected to rise 0.3% after gaining 0.2% a month earlier, with the annualized reading expected to dip to 2.4%, from the previous 2.5%.

With the U.S. economy considered to be at full employment, experts suggest that the days where the jobs report could have a major impact on markets are long gone, noting it unlikely to change the outlook for the future path of the Federal Reserve’s monetary policy.

Conviction for another rate hike from the Fed before the end of the year has faded, according to Investing.com’s Fed Rate Monitor Tool, with just 31% of market players expecting another move by December due to worries over the subdued inflation outlook.

Ahead of the report, the dollar remained under pressure against major rivals on Friday as political concerns remained at the forefront and market players waited for the jobs data.

A report just minutes before Thursday’s stock market close indicated that Special Counsel Robert Mueller convened a Grand Jury to investigate alleged Russian interference in the 2016 presidential elections that may have involved members from Donald Trump’s campaign.

President Trump quickly responded to the news, stating in a rally that “They’re trying to cheat you out of the leadership that you want with a fake story.”

Investors remained concerned over the political upheaval in Washington in so far as it distracts the President from moving forward infrastructure and fiscal policies with the greenback having dropped 10% since January.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.01% to 92.69 by 7:02AM ET (11:02GMT).

Similarly, gold also showed little movement as market players were cautious ahead of the data release.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery inched up just 0.01% to $1,267.96 by 5:33AM ET (11:33GMT), not far from Tuesday’s seven-week highs of $1,273.30.

On the company front, investors will react to earnings reported after Thursday’s close.

Shares in GoPro (NASDAQ:GPRO) soared 14% in pre-market trade Friday after the camera maker beat estimates, forecast a smaller-than-expected third quarter loss and confirmed that it would launch the latest version of its flagship camera by the holiday season.

Kraft Heinz (NASDAQ:KHC) also saw shares rise more than 1% in Thursday’s after-hours market after the maker of Jell-O and Velveeta reported profit that beat on cost cuts.

Cigna (NYSE:CI) may also see upside in Friday’s session as the health insurer reported a 49% increase in quarterly profit before the bell.

Warren Buffett’s Berkshire Hathaway (NYSE:BRKa), Allianz (DE:ALVG), CBOE Holdings (NASDAQ:CBOE), Potbelly (NASDAQ:PBPB) and Trivago (NASDAQ:TRVG) were among other firms scheduled to report before the opening bell.

In other news outside of earnings, Snap (NYSE:SNAP) saw shares rise more than 2% on a report that Google (NASDAQ:GOOGL) made an offer to buy the maker of SnapChat for $30 billion late last year. That was before the company went public earlier this year.

Meanwhile, oil prices declined for a second consecutive day on Friday, on track for weekly losses of almost 3%, as investors remained concern over increasing U.S. production and OPEC output.

Crude oil exports by the Organization of the Petroleum Exporting Countries (OPEC) rose to a record high in July, driven largely by soaring exports from the group's African members, according to a report by Thomson Reuters Oil Research this week.

Market participants will keep an eye on increasing U.S. shale production when Baker Hughes releases its most recent weekly rig count data later on Friday.

U.S. crude futures fell 0.24% to $48.91 by 7:03AM ET (11:03GMT), while Brent oil lost 0.27% to $51.87.

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