Stock futures hold records close to July jobs report

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Stock futures opened slightly lower Thursday night ahead of a key labor market report, which should offer a more complete picture of the labor market recovery and help inform next steps for policymakers.

S&P 500 contracts were flat to slightly lower at the start of the overnight session. The blue chip index closed at a record high Thursday, erasing declines from a day earlier. The Dow Jones and the Nasdaq also finished in positive territory.

For investors, all eyes will be on the Department of Labor’s July employment report on Friday. The print should show that a whopping 865,000 jobs returned last month as the unemployment rate fell to its lowest level since March 2020.

With the Delta variant plaguing the United States and other labor market constraints still in play, some economists are bracing for the possibility of a drop in Friday’s report. And just earlier this week, ADP’s closely watched impression of private wages was a big disappointment, with just 330,000 jobs returning from nearly 700,000 expected. While the ADP report has historically not perfectly followed the Ministry of Labor’s “official” monthly employment reports, it has tended to be a good directional indicator of labor market trends.

For equity investors, however, an online or lower-than-expected impression isn’t necessarily negative.

“The market actually wants a bad jobs report, as perverse as it sounds,” Opimas CEO Octavio Marenzi told Yahoo Finance, adding that he wished “the jobs numbers to be weak. so that the Fed has a reason to continue its monetary policy “.

Namely, the Federal Reserve has suggested it looks for further progress in the economic recovery before announcing or implementing any changes to its very accommodative policies. Earlier this week, Federal Reserve Governor Christopher Waller said he would back the announcement of a cut in crisis-time central bank bond purchases by September if the next report on employment was solid. Likewise, Federal Reserve Vice Chairman Richard Clarida has said he will support an interest rate hike in 2023 if the economic recovery continues on its current path.

Other economists have suggested that this month’s jobs report could be as strong or stronger than expected, but that this would only serve as a retrospective indicator given the deceleration in growth occurring as a result of the latest wave of virus problems.

“July is a bad seasonal time for employment in states and local communities at the end of the school year, but as layoffs have been loaded upstream, it is possible that the seasonal factor is contributing disproportionately to this. public sector employment field, ”Neil Dutta, director of macro research at Renaissance Macro Research, wrote in an email. “I think the bigger story is that even if July is strong it won’t matter because no one should expect a repeat of performance in August with a drop in economic confidence due to the ‘increased hospitalizations for COVID in parts of the country. ”

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6:10 p.m. ET Thursday: Stock futures line up flatline ahead of jobs report

Here’s where the markets were trading on Thursday night:

S&P 500 Futures Contracts (ES = F): -1.75 point (-0.04%) to 4,419.75
Dow Futures (YM = F): -19 points (-0.05%) to 34,924.00
Nasdaq Futures (NQ = F): -2 points (-0.01%) to 15,165.75

Traders gather at a post on the floor of the New York Stock Exchange on Tuesday, August 3, 2021. Stocks had a mixed start on Wall Street as traders weigh in another large set of corporate earnings reports, which have been widely disseminated. ahead of analysts forecasts. (AP Photo / Richard Drew) — Traders gather at a post on the floor of the New York Stock Exchange on Tuesday, August 3, 2021. Stocks got off to a mixed start on Wall Street as traders weigh in another large set of corporate earnings reports, which have been widely disseminated. ahead of analysts’ forecasts. (AP Photo / Richard Drew)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck