LONDON — Stock index futures at 6.30am ET indicate that the Dow Jones Industrial Average (DJINDICES: ^DJI) may open up by 0.10% this morning, while the S&P 500 (SNPINDEX: ^GSPC) may open 0.11% higher, after both indices closed at new record highs yesterday.
European markets were mixed ahead of today’s US jobs report. Strong results from insurers Allianz and AXA helped lift the German and French markets respectively, while in London, markets edged lower, as miners including Randgold Resources, Fresnillo and BHP Billiton fell. Royal Bank of Scotland Group (LSE: RBS) (NYSE: RBS.US) was also lower, sliding 4% after reporting a first-half pre-tax profit of £1.3bn, and announcing that its next CEO will be internal appointment Ross McEwan.
In the US, all eyes will be on this morning’s nonfarm payrolls report, due at 8.30am ET. Jobs data has been positive so far this week, with both the ADP payroll numbers and yesterday’s jobless claims report beating expectations. Analysts’ consensus forecasts suggest that today’s report will show that 180,000 new jobs will have been added to the US economy in July, down from 195,000 in June. Also at 8.30am, July’s unemployment rate is expected to edge down to 7.5%, from 7.6% in June, personal income is expected to have risen by 0.5% in June, following 0.5% rise in May, and consumer spending is expected to have risen by 0.5% in June, following a 0.3% increase in May. Finally, at 10am, factory orders are expected to have risen by 2.3% in June, following a 2.1% increase in May.
Corporate news is likely to be overshadowed by this morning’s jobs report and today’s earnings calendar is pretty minimal. However, both Chevron and Viacom are due to report their latest quarterly earnings before the opening bell, while manufacturer Eaton may prove a drag after reporting second-quarter adjusted earnings per share of $1.09 this morning, missing analysts’ forecasts. The firm also cut its full-year guidance.
Other stocks that may be actively traded when markets open include LinkedIn, which was 9.2% higher in pre-market trading this morning, after reporting strong second-quarter earnings and sales growth, after the close last night. American International Group may also gain — the group was up 5% in pre-market trading after it announced last night that it would reinstate its dividend and initialise a share buyback plan.
Finally, let’s not forget the Dow’s daily movements can add up to some serious long-term gains. Indeed, Warren Buffett recently wrote: “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.“
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> Roland does not own shares in any of the companies mentioned in this article.