Stock futures rise ahead of jobless claims and profits

[ad_1]

Stock futures opened slightly higher on Wednesday evening as investors waited for more earnings and data on the labor market recovery.

S&P 500 contracts traded one tick above the flat line. The blue chip index ended the day in the red, falling from Tuesday’s closing record. The Dow Jones also ended lower, while the Nasdaq closed higher.

Some of the closely watched companies that released results after the market closed on Wednesday disappointed by Wall Street consensus estimates, punctuating what has otherwise been an unusually strong second quarter earnings season. Rideshare giant Uber (UBER) posted a larger-than-expected Adjusted EBITDA loss for the second quarter, a day after little rival Lyft (LYFT) unexpectedly reported adjusted earnings over the same period . And Etsy’s (ETSY) shares sank after the company released sales forecasts for the current quarter that were below estimates, confirming the fears of many traders about a sharp slowdown in e-commerce growth in the world. during the second semester of this year.

Aside from these irregularities, however, most large companies released second quarter results that exceeded estimates. As of Friday, 59% of S&P 500 companies released results, and 88% of them beat Wall Street earnings per share estimates, according to the latest FactSet data. The expected earnings growth rate of S&P 500 companies is heading towards 85.1%, which would be the biggest jump since the fourth quarter of 2009.

“The short term power behind the market is incredibly strong earnings. There is very little sign that they are not going to continue to be strong until the end of the year and into next year,” Jonathan Golub , chief US equity strategist for credit. Swiss, Yahoo Finance told Yahoo on Wednesday. “But you might be starting to see some cracks on the edge, if you will, that make it a little more difficult. And where it shows up is not in the market as a whole, but in the areas. sectors and action groups and that leadership, and there’s a little more rotation there. ”

Over the past month, defensive sectors including utilities and healthcare outperformed amid concerns over the spread of the Delta variant. For the year to date, however, the cyclical sectors of the S&P 500, including energy and financials, have remained the main outperformers, in line with investor beliefs that this year would be a year of recovery for the economy. as a whole compared to last year. low.

Interest rates also fell again on Wednesday, with the benchmark 10-year yield briefly hitting its six-month low at less than 1.13%. The drop coincided with more worrying signals about the pace of the economic recovery, with an increase of just 330,000 workers in July, less than half of the consensus estimate, according to ADP’s latest monthly report on Wednesday. Nonetheless, recent data has been more positive, with the Institute for Supply Management’s July services index hitting an all-time high, even though business survey respondents cited disruptions and shortages in the supply chain. supply.

“We are having difficulty with logistical challenges, we have some inflation which is causing indigestion right now,” Michael Vogelzang, chief investment officer of Captrust, told Yahoo Finance on Wednesday. “But in particular, the Delta variant of COVID-19 is actually potentially positive for the stock and bond markets, mainly because yes, it can induce a bit of a downturn in the economy, but frankly the economy is in full swing. boom and it wouldn’t be the end of the world to slow it down a bit. But it could also give central banks around the world a bit more hedge to continue providing more liquidity than I think the market is going for. was waiting. This could actually accelerate or extend part of the equity bull market. ”

–

6:10 p.m. ET Wednesday: Stock futures rise

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

S&P 500 Futures Contracts (ES = F): +1.25 point (+ 0.03%) to 4,396.00
Dow Futures (YM = F): +21 points (+ 0.06%) to 34,711.00
Nasdaq Futures Contracts (NQ = F): +4 points (+ 0.03%) to 15,077.5

–

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