U.S. Stock Futures Rise Ahead of Key Labor Market Report
U.S. stock futures are pointing higher on Friday as investors anticipate the release of a crucial monthly labor market report. The main averages on Wall Street were closed for the Independence Day holiday on Thursday.
2. Nonfarm Payrolls Ahead
Economists predict that U.S. employers added fewer jobs in June, potentially signaling a cooling labor demand. This could bolster the case for the Federal Reserve to begin cutting interest rates down from more than two-decade highs later this year. Nonfarm payrolls are expected to show an increase of 191,000 jobs in June, down from 272,000 in May. Meanwhile, the growth rate in average hourly wages is estimated to have slowed slightly to 0.3% month-on-month, with the unemployment rate expected to remain at 4.0%.
Recent data showed that private payroll growth eased last month, and the quits rate—an indicator of labor market confidence—held steady. This suggests a potential reduction in wage pressures. A cooling labor market could lead to less upward pressure on inflation, supporting hopes that the Fed might cut rates in 2024. The central bank has indicated plans to reduce borrowing costs just once this year as it looks for more evidence of sustained moderation in price gains.
3. Samsung Electronics Expects Surge in Second-Quarter Profit
Samsung Electronics (KS:005930) anticipates a significant rise in its second-quarter profit, driven by artificial intelligence-driven demand for memory chips and electronic devices. The world’s largest maker of memory chips expects its operating profit for the three months ending June 30 to rise to 10.4 trillion won ($7.50 billion), compared to a profit of 670 billion won for the same period last year. This figure exceeds predictions of 8.8 trillion won, according to LSEG SmartEstimate forecasts cited by Reuters.
Samsung’s earnings were boosted by increased demand for high-bandwidth memory chips from the AI industry. The company plans to begin mass-producing advanced HBM chips this year to secure more orders from AI leader Nvidia
4. Labour Landslide; French Vote Looms
The political climate in the U.K. is in focus after the opposition Labour Party achieved a comprehensive victory in a parliamentary election, ending 14 years of Conservative government. As of 03:16 ET, Labour, led by Keir Starmer, had won 410 of the 650 seats in parliament. U.K. stocks and the pound have gained as traders anticipate a reduction in market volatility previously driven by political and economic turmoil under the Conservatives.
Attention now turns to the second round of voting in the French parliamentary election on Sunday, following the success of the far-right National Rally in the initial vote last weekend.
5. Oil Steady
Crude prices are hovering around the flatline on Friday but are on track for a fourth consecutive positive week on hopes of strong summer fuel demand in the U.S. By 03:19 ET, U.S. crude futures (WTI) were mostly unchanged at $84.05 a barrel, while the Brent contract was steady at $87.45 a barrel.
Oil prices rose this week due to strong summer demand expectations in the U.S., with official data from the Energy Information Administration showing significant declines in the country’s crude and fuel stockpiles last week. Market sentiment has also been supported by intensifying geopolitical tensions in the Middle East.
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