Benzinga - by Shanthi Rexaline, Benzinga Editor.
U.S. stocks may open higher on Friday after a brief pause following four consecutive winning sessions. Traders are optimistic about a potentially favorable non-farm payrolls report that could indicate an easing labor market tightness. Additionally, the market will be influenced by manufacturing activity data and pricing data from the sector.
Tech earnings, released after Thursday’s close, elicited mixed reactions. Energy stocks may see some strength as oil prices continue to rise.
Cues From Thursday’s Trading:
On Thursday, major indices had a mixed performance. They started positively but later fluctuated before closing mostly lower. Early optimism stemmed from data showing that the annual rate of the core consumer price expenditure index, the Federal Reserve’s preferred inflation gauge, met expectations.
The tech-heavy Nasdaq Composite Index finished slightly higher, maintaining a one-month high, while the S&P 500 Index, Dow Industrials, and Russell 2000 Index moved downward.
Utilities, real estate, and healthcare stocks weighed on sector indices.
US Index Performance On Thursday
| Index | Performance (+/-) | Value |
| Nasdaq Composite | +0.11% | 14,034.97 |
| S&P 500 Index | -0.16% | 4,507.66 |
| Dow Industrials | -0.48% | 34,721.91 |
| Russell 2000 | -0.19% | 1,899.68 |
Analyst Color:
An analyst is confident going into September, given the late-month bounce the stock market saw.
Fund manager Louis Navellier said, "Overall, the strong recovery in late August is an endorsement that current valuations, based on low double-digit earnings growth in the first half of ’24 remain intact."
The analyst expects concerns about the consumer and China’s weakness to keep things grounded.
"Going into September, the seasonably weakest month, on a strong month-end rally is encouraging that the bull trend is still intact and may get a boost if the Fed skips an increase in September," he added.
Carson Group's Ryan Detrick concurred that September is the worst month for stocks. When the S&P 500 Index was up 10% or more year-to-date in the past but declined in August, eight out of ten times, the index has risen in September, he noted. The median gains have been 2.6% since 1950, he added.
Futures Today
Futures Performance On Friday
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.16% |
| S&P 500 | +0.34% |
| Dow | +0.40% |
| R2K | +0.31% |
In premarket trading on Friday, the SPDR S&P 500 ETF Trust (NYSE:SPY) rose 0.34% to $451.89 and the Invesco QQQ ETF (NASDAQ:QQQ) gained 0.16% to $378.59, according to Benzinga Pro data.
Upcoming Economic Data:
The Labor Department is scheduled to release its non-farm payrolls report for August at 8:30 a.m. EDT. Economists, on average, expect the economy to add 170,000 jobs compared to the 187,000 jobs added in July. The unemployment rate is expected to remain unchanged at 3.5%. The average hourly earnings – an inflation measure, is expected to rise 4.4% in August, the same pace as in the previous month.
S&P Global will release its final manufacturing purchasing managers' index for August at 9:45 a.m. EDT. The index is expected to be left unrevised at the flash estimate of 47, down from 49 in July.
The Institute for Supply Management is due to release its manufacturing PMI for August at 10 a.m. EDT. Economists, on average, expect the index to show that the manufacturing sector continued to contract, although at a slower rate, in August. The index is expected to edge up from 46.4 in July to 47 in August.
See also: How To Trade Futures
Stocks In Focus:
- Nutanix, Inc. (NASDAQ:NTNX) rallied and climbed over 18% in premarket trading following the release of its quarterly results.
- Among the other stocks moving on earnings are Broadcom, Inc. (NASDAQ:AVGO) (down over 4%), Dell Technologies, Inc. (NYSE:DELL) (up about 9.50%), MongoDB, Inc. (NASDAQ:MDB) (up about 6.50%), Oxford Industries, Inc. (NYSE:OXM) (down about 5%), PagerDuty, Inc. (NYSE:PD)(down nearly 11%), and SentinelOne, Inc. (NYSE:S) (up over 6%).
Crude oil futures rose 1.30% to $84.72 in early European session on Friday following a 2.45% jump on Thursday amid the dollar's weakness.
The benchmark 10-year Treasury note rose 0.023 percentage points to 4.114% on Thursday.
Most Asian markets advanced on Friday, although the buying interest was muted ahead of the U.S. non-farm payrolls data. Caixin's survey shows that the Chinese manufacturing sector moved into expansion territory, lending support to domestic stocks and the region. The Australian and New Zealand markets, however, retreated in the session. The Hong Kong market was closed for a public holiday.
European stocks were mixed in late-morning trading on Friday.
Read Next: Dow Jones Bulls Lock Horns At Resistance Level: What’s Next For Blue-Chip Gauge?
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.