U.S. Markets Await Jobless Claims Data Amid Mixed Economic Signals

US futures, jobless claims, Apple - what's moving markets By Investing.com

Investing.com -- Wall Street futures are drifting lower Thursday ahead of the release of the weekly jobless claims data. Apple is in the spotlight over claims it could charge for its AI product, while the impact of the global carry trade remains in focus. U.S. stock futures edged lower Thursday, stabilizing to a degree following several dramatic swings in recent days. There are more earnings to digest Thursday, including from drugmaker Eli Lilly (NYSE:LLY) and fashion retailer Under Armour (NYSE:UA). Additionally, Bumble (NASDAQ:BMBL) stock slumped 30% premarket after the online dating agency cut its annual revenue growth forecast, sparking worries about its growth plans. Warner Bros Discovery (NASDAQ:WBD) stock fell almost 10% premarket after the entertainment giant reported a quarterly net loss of $10 billion, announcing it has written down the value of its traditional television networks by $9.1bn, a dramatic recognition of how fast streaming is eroding the cable business model. Worries about a U.S. hard landing, after Friday's weak nonfarm payrolls release, sparked the sharp selloff on Wall Street. With this in mind, the macro spotlight is squarely on the weekly jobless claims figures out of the U.S. later in the day, with economists expecting initial jobless claims to total 241,000 last week, a small reduction from the prior week's 249,000. That release showed the number of Americans filing new applications for unemployment benefits increased to an 11-month high last week, adding to fears that the labor market was cooling quickly. The report from the Labor Department on Thursday also showed the number of people on jobless rolls swelling in mid-July to the highest level since late 2021. Federal Reserve Chair Jerome Powell said last week that while he viewed the changes in the labor market as "broadly consistent with a normalization process," policymakers were "closely monitoring to see whether it starts to show signs that it's more than that." One of the main contributors to the market turmoil of the last few days has been the unwinding of the global carry trade - which involves investors borrowing money in a place where interest rates are low and using it to invest elsewhere in assets that generate a higher return. For years this has widely involved the Japanese yen, as the Bank of Japan has held interest rates near zero in an attempt to stimulate a stagnant economy. However, the BOJ raised interest rates last week, while rates are already falling in a number of other regions while the Federal Reserve has signaled that it may join this club next month. Analysts at JPMorgan said in a note that the risk-reward for global carry is low due to U.S. elections and potential repricing of funders on lower U.S. rates and rates momentum is expected to turn more significantly against G10 carry which favors the rotation to value. It added carry baskets have already suffered a significant drawdown following the tech sell-off, and the spot component of the global carry basket suggests that 75% of carry trades have been removed. Apple (NASDAQ:AAPL) expressed optimism over its iPhone sales going forward at its latest quarterly release, as it expects additional features based on artificial intelligence to attract buyers. The tech giant is expected to launch this fall what analysts have called the biggest software upgrade for the iPhone, including artificial intelligence features - known as Apple Intelligence. Apple could charge its users up to $20 for its advanced artificial intelligence features, analysts told CNBC, as the company looks to boost the growth of its lucrative services business. Apple's services division brought in $24.2 billion in the June quarter, making it unique as many other hardware firms have not managed to monetize software. It is not unusual for technology firms to charge for their AI offerings. OpenAI, for example, has a subscription fee for more advanced ChatGPT features and Microsoft (NASDAQ:MSFT) charges for its AI Copilot tool. Crude prices retreated Thursday, on course to end a two-day winning streak, as dismal economic data from top oil importer China reignited concerns surrounding global demand. By 04:15 ET, the U.S. crude futures (WTI) dropped 0.1% to $75.19 a barrel, while the Brent contract fell 0.2% to $78.21 a barrel. Data released earlier Thursday showed China imported around 10 million barrels of oil in July, down 12% from June and 3% lower than the same period last year. Concerns over Chinese growth, coupled with fears of a U.S. recession, have weighed heavily on oil prices in recent sessions. Both benchmarks had gained around 3% over the last two sessions, bouncing off near-2024 lows, helped by the simmering tensions in the Middle East. Additionally, crude inventories in the United States, the world's largest oil consumer, fell 3.7 million barrels, data showed, marking a sixth straight weekly decline to six-month lows.

MORNING BID AMERICAS-Markets stay bumpy awaiting jobs reality check

A look at the day ahead in U.S. and global markets from Mike Dolan Seeking some calm, markets remain edgy following the volatility jolt of the past week and traders now seek some re-assurance the real economy has not shifted underneath them. Volatility spikes like the one seen on Monday rarely disappear instantly and, with the VIX 'fear gauge' still above historical averages of about 20, some turbulence remains. At less than half Monday's peak, however, some healing is underway. The jangled nerves were evident on Wednesday as an initial bounce in Wall St stocks faded by the close, with anxiety fed by another red flag on the artificial intelligence theme from Super Micro's poor results and after a messy 10-year Treasury auction. To be sure, the 10-year note sale was allocated at 3 basis points above pre-auction levels and demand at 2.32 times the paper on offer was the lowest in almost two years. But that mostly reflected the week's sudden swoon in yields below 4% and the $42 billion sale went off with funding for Treasury almost 15bp cheaper than it would have got a week ago. Some $25 billion of 30-year bonds are up for grabs later on Thursday and provide the latest test - with the 2-to-30-year Treasury yield curve now positive to the tune of 27bps, having hit its steepest in two years on Monday. The 2-to-10 curve remains slightly inverted. Attention now turns back to whether the U.S. labor market is weakening at a pace that Friday's payrolls report suggested and the release on Thursday of the weekly jobless claims report takes on elevated significance for markets still largely priced for a Federal Reserve rate cut of up to 50bps next month. New unemployment claims have been rising and hit their highest since August last year in the most recent week. Stock futures were steady ahead of the open today, however, with the VIX remaining below 30. European and Asian benchmarks were slightly lower - but with far less movement than earlier in the week. China's mainland index was marginally higher. It was nervy still in Japan - the epicenter of much of the past week's angst due to unwinding short yen 'carry trades' that seeded wild 10%-plus swings in the Nikkei stock index. But with a loss on Thursday of less than 1%, it appeared almost serene by comparison with Monday and Tuesday. There were some concerns from the minutes of last week's rate-raising Bank of Japan meeting, which showed board members calling for the need to keep raising interest rates. But that was recorded before the market turbulence that has since seen BOJ top brass say they would stall on that if it were just to fuel more market disruption. And Finance Minister Shunichi Suzuki said on Thursday the authorities were closely watching stock market developments, even if not yet planning specific actions yet. With estimates that most of the outstanding yen carry trades had now been unwound, the dollar/yen exchange rate steadied and retained a perch above 146. The dollar index more broadly edged lower as two and 10-year Treasury yields subsided once more in early trading on Thursday. In earnings, there will be a close look at pharma giant Eli Lilly's results. European rival Novo Nordisk on Wednesday reported weaker-than-expected quarterly sales of its popular weight-loss drug Wegovy, stirring worries among investors about stiffening competition from Eli Lilly and sending its shares down 8%. Novo is spending billions of dollars to lift Wegovy production to meet demand and fend off Lilly, which launched its rival therapy Zepbound in the U.S. last December. While the two companies are now going head-to-head with obesity treatments in a number of markets - the most lucrative one by far is the U.S., where more than 70% of adults are obese or overweight. Key developments that should provide more direction to U.S. markets later on Thursday: * US weekly jobless claims, June wholesales sales; Mexico July inflation * Richmond Federal Reserve President Thomas Barkin speaks * Central Bank of Mexico policy decision * US corporate earnings: Eli Lilly, Gilead Sciences, News Corp, Paramount Global, Expedia, Insulet, Solventum, Take-Two Interactive Software, Akamai Technologies, Epam Systems, Viatris, Martin Marietta Materials, Parker-Hannifan, NRG Energy, Vistra * US Treasury sells $25 billion of 30-year bonds, $95 billion of 4-week bills (By Mike Dolan; Editing by Toby Chopra mike.dolan@thomsonreuters.com)

Nasdaq, S&P 500 Futures Little Changed: What's Going On - Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), SPDR S&P 500 (ARCA:SPY)

A market strategist says valuations haven't become cheap enough to set off a buying wave. U.S. stocks are set for a mixed start on Thursday as concerns regarding the economy and incremental yen carry trade unwinding remain an undercurrent. Traders may be keen to receive the jobless claims report, given the recent sell-off kickstarted last Thursday, partly due to a spike in the data. Reactions to earnings news have been mixed. The CBOE Volatility Index, aka VIX, has resumed its climb above the 28 level. With the uncertainty around the economy and rate trajectory abounding, in the absence of any major polarizing catalysts, the market could see back-and-forth movement in the near term. Cues From Last Session: The sell-off resumed Wednesday as early optimism regarding the worst being behind gave way to fears, taking the averages on a steady decline throughout the session. The positive start came after the Bank of Japan reassured that rate hikes are not imminent but techs dragged the market lower, as Super Micro Computer, Inc.'s SMCI earnings miss weighed down on AI-levered stocks. Reacting to Super Micros' results, fund manager Louis Navellier said, "This has brought concerns regarding the profitability of building out AI networks despite the massive spending by the Mega Tech companies." The tech-heavy Nasdaq Composite suffered the most as it pulled back to a three-month low, while the Dow Jones Industrial Average and the S&P 500 Index held above Monday's closing level. Small-caps also experienced a strong sell-off, with the Russell 2,000 settling at a one-month low. Mike Wilson, Morgan Stanley's CIO and Chief US Equity, said in a podcast on Monday that he expects the markets to remain vulnerable in the near term until "we get better growth data or more comfort from Fed on policy support." The strategist, however, does neither of these would be forthcoming soon. He expects support to come from cheap valuations, although he doesn't believe stocks have become so cheap to set in motion a buying spree. The S&P 500 still traded at 20 times the forward 12-month earnings estimate, he said, adding that "things aren't actually cheap until we reach 17-18x, which is more than 10 percent away from where we are trading." Upcoming Economic Data: The Labor Department's jobless claims report due at 8:30 a.m. EDT is expected to show that the number of individuals claiming unemployment benefits may have come in at 240,000 for the week ended Aug. 3, down from 249,000 in the previous week. The Commerce Department will release its wholesale inventories report for June at 10 a.m. EDT. Economists, on average, expect whole inventories to have increased by 0.2% month-over-month, slower than the 0.6% growth in May. The Treasury will auction four- and eight-week notes at 11:30 a.m. EDT and 30-year bonds at 1 p.m. EDT. Richmond Fed President Tom Barkin is scheduled to speak at 3 p.m. EDT. See Also: How To Trade Futures Stocks In Focus: Bumble Inc. BMBL plunged about 40% in premarket trading following the online dating company's quarterly results. Other stocks reacting to earnings are Blink Charging Co. BLNK (down over 9.50%), Fastly, Inc. FSLY (down over 22%), Forward Air Corporation FWRD (up nearly 18%), HubSpot, Inc. HUBS (up over 8%), Monster Beverage Corporation MNST (down over 8%), Viasat, Inc. VSAT (up nearly 7%), Zillow Group, Inc. Z (up nearly 12%) and Warner Bros. Discovery, Inc. WBD (down over 12%). Cars.com Inc. CARS, CyberArk Software Ltd. CYBR, Hanesbrands Inc. HBI, Krispy Kreme, Inc. DNUT, Murphy Oil Corporation MUR, Papa John's International, Inc. PZZA, PENN Entertainment, Inc. PENN, Plug Power Inc. PLUG, Restaurant Brands International Inc. QSR and Under Armor, Inc. UA are among the key companies due to release their earnings reports ahead of the market opening. Those reporting after the close are Akamai Technologies, Inc. AKAM, CarGurus, Inc. CARG, Dropbox, Inc. DBX, e.l.f. Beauty, Inc. ELF, Expedia Group, Inc. EXPE, Five9, Inc. FIVN, Gilead Sciences, Inc. GILD, Insulet Corporation PODD, Paramount Global PARA, Take-Two Interactive Software, Inc. TTWO, Trade Desk, Inc. TTD, Unity Software Inc. U, and Yelp Inc. YELP. Commodities, Bonds And Global Equity Markets: Crude oil futures were little changed after the advances in the previous two sessions, with a barrel of WTI-grade crude oil trading at the $75+ level. Gold futures were modestly higher. The 10-year Treasury note yield rose 5.4 points to 3.914%. Bitcoin BTC/USD was little changed above the $57K level. Most Asian markets fell on Thursday, as stocks in the region tracked the negative performance of Wall Street overnight. Japan's Nikkei 225 average led the declines, although the Chinese and Hong Kong markets ended little changed. European stocks are declining in early trading. Read Next: Move Over Yen, Yuan Carry Trades Could Be Next Ticking Bomb, Warns Strategists: 'But It's Below The Danger Levels We Monitor' Image Via Shutterstock Market News and Data brought to you by Benzinga APIs