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Stock index futures falter for US GDP data, weekly unemployment benefits

Futures contracts pointed to a lower start for US equity indices on Thursday, ahead of data expected to show that a third of the US economy has been year-on-year in the second quarter, and a weekly unemployment benefit report that could indicate the bounceback of the economy due to the coronavirus pandemic is losing steam due to a renewed rise in COVID-19 cases.

Sentiment also weighed on the lack of progress in talks between Congressional Democrats, Republicans and the White House on a new coronavirus aid package.

What do large indexes do?

Futures on the Dow Jones Industrial Average YM00,
-0.77%
fell 242 points, or 0.9%, to 26,198, while S&P 500 futures ES00,
-0.78%
recorded 31.90 points, or 1%, at 3,220.50. Nasdaq-100 futures NQ00,
-0.91%
recorded 113.50 points, or 1.1%, at 10,560.75.

The Dow DJIA,
+ 0.60%
rose 160.29 points, or 0.6%, to close at 26,539.57, while the S&P SPX,
+ 1.24%
reached 40 points, or 1.2%, ending in 3,258.44. The Nasdaq Composite COMP,
+ 1.35%
jumped 140.85 points, or 1.4%, to finish at 10,542.94.

What drives the market?

Investors will get an estimate of how badly the pandemic has hammered the economy in the second quarter, when the government releases gross domestic product data at 8:30 AM Eastern Eastern. Economists surveyed by MarketWatch estimate that GDP shrank 34.6% year-on-year from early April to late June.

Separately, the first claims for unemployment benefits last week are expected to rise from 1.52 million the previous week to 1.51 million.

“Last week, jobless claims pointed to the recovery of the stagnating labor market,” Fiona Cincotta, market analyst at City Index, said in a note. Although “one week is by no means a new trend, two weeks of a stagnant recovery can be more nervous and worsen sentiment.”

There were no signs of progress toward a spending package, as lawmakers face a self-imposed Friday deadline to work out a deal. That is when the additional unemployment benefits, which are believed to help mitigate the pandemic hit, will expire.

Equities increased earnings on Wednesday after the Fed left interest rates unchanged as expected, but indicated that it intended to keep interest rates close to zero and continue to support the economy – and do more if necessary. Fed Chairman Jerome Powell warned that the resurgence of coronavirus cases in many U.S. states could curb economic growth and said the path of recovery depends on the path of the virus.

It’s the most hectic week of corporate earnings reporting season, with results from dozens of high-profile companies expected on Thursday, including Dunkin Brands
DNKN,
+ 2.81%,
DuPont de Nemours Inc.
DD,
+ 2.79%,
Northrop Grumman Corp.
NOC,
+ 0.76%,
Eli Lilly & Co.
LLY,
-0.55%
and Yum Brands Inc.
YUM,
+ 2.24%
for the bell.

A slew of tech giants will report after the shutdown, including Google parent Alphabet Inc.
Oog,
+ 1.44%
Oogl,
+ 1.32%,
Apple inc.
AAPL,
+ 1.91%
Facebook Inc.
FB,
+ 1.37%
and Amazon.com Inc.
AMZN,
+ 1.10%.

The executives of those four companies were grilled for hours on Wednesday in a virtual hearing before the House Judiciary Committee’s antitrust subcommittee.

Read:Amazon, Apple, Facebook and Google CEOs grilled by members of the House during historic antitrust hearings

Which companies are central?
  • Procter & Gamble Co.
    PG,
    + 0.33%
    Shares were up more than 2% after the consumer products company posted Q4 fiscal earnings and revenues that exceeded expectations and delivered a positive outlook, driven by increased demand for household cleaners and personal health products during the COVID-19 pandemic.

  • Shares of United Parcel Service Inc.. Ups,
    + 3.39%
    jumped more than 6% in premarket trading, after the package delivery giant reported second-quarter earnings and revenues that easily outpaced forecasts, driven by a surge in residential demand and healthcare shipments stemming from the COVID-19 pandemic.

  • Eli Lilly shares
    LLY,
    -0.55%
    were more than 2% higher than the clock after the drug manufacturer surpassed earnings expectations and raised the full-year outlook, while revenues fell short of forecasts.

  • Northrop Grumman NOC,
    + 0.76%
    Shares of
    rose 1.5% in premarket action after the defense contractor posted more than expected earnings and sales for the second quarter and raised its full-year outlook.

  • DuPont shares DD,
    + 2.79%
    after chemistry, there were few changes in the premarket trade reported a greater than expected loss.

  • Dunkin ‘Brands DNKN,
    + 2.81%
    shares rose in premarket after reporting adjusted second-quarter earnings that were below expectations, but sales fell less than forecast and announced the reintroduction of its dividend program.

What do other markets do?

In Asia, China’s CSI 300 index 000300,
-0.48%
fell 0.5%, the Shanghai Composite SHCOMP,
-0.23%
fell 0.2%, Hong Kong’s Hang Seng Index HSI,
-0.69%
lost 0.7% and the Japanese Nikkei 225 NIK,
-0.25%
gave 0.3%.

In European trade, the Stoxx 600 Europe index SXXP,
-1.22%
fell 1.6% and the UK FTSE 100 UKX,
-1.63%
was 1.9% lower.

Golden futures
GCQ20,
-0.34%
were 0.3% lower, while the ICE US Dollar Index DXY,
+ 0.11%
0.1% up. Oil futures CLU20,
-2.01%
were lower, with the US benchmark
CLU20,
-2.01%
decline of 1.6% on the New York Mercantile Exchange.

The return on the 10-year US treasury TMUBMUSD10Y,
0.561%
decreased 2.2 basis points to 0.555%. Returns move in the opposite direction of prices.

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