Dow Jones futures up 48 points, American Express earnings loom

The Dow is expected to open modestly higher on Friday, after equities retreated sharply on Thursday, following the release of weaker than expected jobs data.

US markets came off strongly on Thursday – with big tech some of the worst hit – after jobless claims data came in worse than economists were expecting. Here, the US Labour Department reported that over 1.416 million individuals filed for unemployment benefits for the week ending 18 July – representing an increase of more than 100,000 applicants, on a week over week basis.

These figure represent a significant miss on forecasts, with economists polled by Reuters expecting unemployment applications would remain steady at around 1.3 million.

'The surge of COVID cases in the Sun Belt and the stalling out of reopening activities in other states has seemingly caused another round of layoffs that has stymied the nascent labour market recovery,’ Jefferies analysts said in a note.

At the time of writing, there were 4.16 million coronavirus cases in the United States – representing more than a quarter of total global cases.

Markets fall as jobs data disappoints

Equity markets responded skittishly to the latest jobs data release – suggesting that the recovery in the labour market may not be as smooth as many had hoped – with the Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite all falling on Thursday.

Though the Dow fell 1.31% or 353 points yesterday, it was the tech-heavy Nasdaq which led the losses – finishing out the session down 2.29% or 244 points, at the 10,461 point level. In spite of that, the Nasdaq remains up for the year – as investors flock to tech stocks at a rate which has seen comparisons to the dotcom tech boom/bust drawn.

As of 6:44PM (New York time), Dow Jones futures traded up 48.6 points or 0.18%, suggesting the key US benchmark would open a shade higher on Friday.

Overall, tech stocks were some of the worst hit yesterday, with Facebook dropping 3.03%, Alphabet falling 3.07%, Apple shedding 4.55%, Microsoft sinking 4.35% and Amazon losing 3.66%.

Elsewhere, social media company Twitter bucked the broader market trend after reporting its second quarter results to the market – finishing out the session up 4.06% at US$38.44 per share. As part of its Q2 the company reported that daily active users (DAUs) rose 34% to hit 186 million, while quarterly revenue declined overall, coming in at US$683 million. Sales were hit hardest by a fall in advertising demand, with advertising revenue plunging from US$727 million in Q2 FY19, to US$562 million in Q2 FY20.

Other high profile, but lesser-known techs were also bid lower, with the likes of Sea, Carvana, DocuSign and Pinterest all down.

Like the Dow, Nasdaq and S&P500 futures also traded higher at the time of writing.

Other bits and pieces

Looking forward, telecoms giant Verizon and American Express are expected to report their second quarter results on Friday; while from an economic data release perspective, Markit manufacturing and services PMI (flash) data, covering July, is set to be released at 9:45am.

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