U.S. stock-index futures pointed to modest gains Friday, as investors look to a labor-market report that could reflect soaring unemployment even as the data signals a decelerating pace of job losses in coronavirus-stricken America.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YM00, +0.66% YMM20, +0.66% were up 102 points, or 0.4%, at 26,355, those for the S&P 500 ES00, +0.54% ESM20, +0.54% were up 10 points, or 0.3%, at 3,120.75, while Nasdaq-100 futures NQ00, +0.34% NQM20, +0.34% were 10.25 points, or 0.2%, higher at 9,644.
On Thursday, the Dow DJIA, +0.04% ended 11.93 points, or less than 0.1%, higher at 26,281.82. The fourth straight gain matches a similar streak of wins for the blue-chip index ended April 27, according to FactSet data. Meanwhile, the S&P 500 SPX, -0.33% fell 10.52 points, or 0.3%, to close at 3,112.35 and the Nasdaq Composite Index COMP, -0.69% finished 67.10 points, or 0.7%, lower to wrap up the session at 9,615.81, putting the index about 2.1% from its Feb. 19 all-time closing high. Both the S&P 500 and the Nasdaq ended a win streak at four consecutive days with the session’s loss.
For the week, the Dow is up 3.5%, the S&P 500 is up 2.3% and the Nasdaq is on pace for a weekly gain of 1.3%, as of Thursday’s close.
What’s driving the market?
Investors face one final test this week of a bullish rally under way in U.S. equity markets over the past few weeks.
Economists predict the official unemployment rate will climb to 19% in May, a MarketWatch survey shows, though some think it could approach as high as 25% unofficially. At that level it could approach the worst levels since the Great Depression.
Friday’s nonfarm-payroll report could show that 7.25 million U.S. jobs were lost in May, after 20 million were lost in April due to the COVID-19 pandemic.
The jobs report will be released at 8:30 a.m. Eastern.
Stimulus measures to limit the economic harm from closures have helped to support stock prices since touching lows in March. Talk of additional funds could also deliver a fresh fillip to the risk assets, with Bloomberg News reporting that the Trump administration is considering a proposal that would see $1 trillion or more in a further round of economic stimulus that could include funds for infrastructure spending. Still, it is unlikely that such measures would occur until later in the summer, if at all, as lawmakers go on a recess.
The U.S. government has injected some $3 trillion in stimulus into the economy, while the Federal Reserve’s balance sheet rose to $7.21 trillion as of June 3, amid efforts to mitigate the severity of the economic downturn wrought by forced closures intended to limit COVID-19’s spread.
Those measures have been often cited as one of the key reasons that provided a runway for stocks to climb from the depths of the coronavirus selloff.
Outside of the labor-market report, a report on consumer credit for April will be released at 3 p.m. Eastern.
Which stocks are in focus?
- Slack Technologies Inc. WORK, -4.91% revenue topped $200 million in a quarter for the first time, but the stock still sank hard in the extended session Thursday afternoon after closing at record highs in recent days.
- PagerDuty Inc. PD, -4.94% reported fiscal first-quarter results that exceeded Wall Street estimates for the digital operations management platform.
- Shares of DocuSign Inc. DOCU, -5.01% were in focus after the company’s latest results showed a boost from companies that were looking for digital ways to execute agreements as the COVID-19 crisis made in-person meetings more difficult.
- Broadcom Inc. AVGO, -0.20% reported results late Thursday that were in line with Wall Street estimates and its outlook range bookended the analyst consensus
- Shift4 Payments Inc. priced its initial public offering at $23 a share Thursday night, above its expected range of $19 to $21 a share.