Dow Futures Up 15 Pts; Caution Ahead of Key Payrolls Report

By Peter Nurse

Investing.com -- U.S. stocks are seen opening largely unchanged Friday ahead of the July jobs report, which should provide further clues about the state of the U.S. economy and the possible future path of Federal Reserve rate hikes.

At 07:00 AM ET (1100 GMT), the Dow Futures contract was up 15 points, or 0.1%, while S&P 500 Futures traded 4 points, or 0.1% higher, and Nasdaq 100 Futures dropped 30 points, or 0.2%.

All eyes Friday will be on the release of the official monthly employment report, due at 08:30 AM ET (1230 GMT), with investors looking to see if the U.S. Federal Reserve's aggressive pace of rate hikes is starting to cause economic growth to slow.

Nonfarm payrolls are expected to have increased by 250,000 jobs in July, after rising by 372,000 in June, with the unemployment rate likely to remain at 3.6%, for the fourth month in a row.

“Our team sees a slight downside risk to the consensus of a 250k increase,” said analysts at ING, in a note. “But unless average hourly earnings fall sharply (expected at 0.3% MoM, 4.9% YoY) it seems far too early to conclude that the Fed's battle against inflation is over. And another 9% YoY US CPI release next week will prevent that too.”

The corporate earnings season has been generally positive this quarter, allowing the broad-based S&P 500 to register gains of a modest 0.5% so far this week, on course to post a three-week winning streak.

Ahead of this, Warner Bros Discovery (NASDAQ:WBD) is likely to be in the spotlight Friday after chief executive David Zaslav said it’s looking at the introduction of a free, ad-supported version of its streaming service.

Results are also due from DraftKings (NASDAQ:DKNG), with the gaming sector growing in popularity. Massachusetts lawmakers recently approved sports betting in that state, making it just the latest state to expand the business.

Oil prices edged lower Friday, on course for hefty losses this week after falling to a new seven-month low overnight on concerns a global economic slowdown will severely hit demand.

The oil market has now given back all the gains prompted by Russia’s invasion of Ukraine with growth worries ratcheted up after the Bank of England's recession warning.

Still, supply remains tight, and the resumption of talks on reviving the Iran nuclear deal that could lead to sanctions being lifted on the Islamic Republic is unlikely to make substantial progress in the near term.

By 07:00 AM ET, U.S. crude futures traded 0.3% lower at $88.26 a barrel, on course for a weekly loss of almost 10%, while the Brent contract fell 0.3% to $93.84, set for a weekly loss of 14%.

Additionally, gold futures fell 0.3% to $1,801.25/oz, while EUR/USD traded 0.1% lower at 1.0230.