Stock futures mixed after jobless claims come in better than expected

Stock futures were mixed Thursday morning, with tech shares continuing their relentless march higher during the pre-market session. A new report from the Labor Department showed both new and continuing unemployment insurance claims fell in the most recently reported weeks.

During the regular session earlier Wednesday, the Nasdaq Composite and individual names including Amazon (AMZN), Microsoft (MSFT), Apple (AAPL), Facebook (FB) and Netflix (NFLX) each hit all-time highs. Each held higher in early trading.

Other non-FAANG tech names including Tesla, Zoom Video Communications, eBay, PayPal and Nvidia also rose to record levels Wednesday, with investors continuing to seek out shares of companies viewed as more insulated from the fallout from the coronavirus pandemic. The Renaissance Capital IPO (IPO) exchange-traded fund – exposed to some of the biggest newly public firms – also rose to a record high as growth companies outperformed.

“We do recognize that bond-like and secular growth stocks (e.g., mega-cap tech, indices such as Nasdaq 100) are already at new all-time highs. Crowding in these stocks indeed reached elevated levels,” JPMorgan strategist Marko Kolanovic wrote in a note Wednesday. “This is in part the result of long-short trades where portfolio managers are buying mega-cap tech and momentum stocks while shorting smaller cyclical and value stocks.”

“This trade is in part driven by market expectations for the COVID-19 pandemic to worsen (or not get better) and lead to permanent shifts in the economy. Another driver is the market’s current expectation of a high probability of a Biden win in the US elections,” he added. “We think the market is not properly pricing either of these events, a repricing of which could result in a rapid momentum selloff and value rally (e.g., tech vs banks, or tech vs energy).”

In the US, the pandemic situation worsened further on Wednesday, with confirmed cases topping three million to comprise more than 25% of the global total. California reported its largest one-day jump in new cases yet at 11,694 as of Wednesday, and case growth in Florida and Arizona remained elevated relative to the national average.

After market close Wednesday, Bed Bath & Beyond (BBBY) shares slumped after announcing a wider than expected first-quarter loss, and the company’s plans to close 20% of its stores in the next two years as a cost-cutting measure during the pandemic.

Thursday morning, investors will receive the latest report on weekly unemployment claims, which is expected to show another That would mark a decline from the prior week’s 1.427 million new claims, albeit at a slowing pace since new claims began dropping from a peak of over 6.8 million in early April.

8:30 a.m. ET: Initial jobless claims, continuing claims come in better than expected for week ended July 4

New weekly unemployment claims totaled 1.314 million for the week ended July 4, the Labor Department said Thursday. This was better than consensus expectations, which anticipated another 1.375 million individuals filed new jobless claims last week.

The prior week’s new jobless claims were downwardly revised to 1.413 million.

Continuing unemployment claims fell to 18.062 million for the week ended June 27. This was better than the 18.8 million expected, and fell from the previous week’s downwardly revised level of 18.76 million.

7:44 a.m. ET: Walgreens Boots Alliance stock falls after swinging to a loss, announcing job cuts

Walgreens Boots Alliance (WBA), a Dow component, fell about 3% in early trading after the company announced weaker than expected fiscal third-quarter results, with performance “significantly impacted by Covid-19,” the company said.

The pharmacy giant swung to a net loss of $1.7 billion, compared with net income of $1 billion in the same quarter last year. The company said this reflected $2 billion in non-cash impairment charges related to its Boots UK business, “reflecting deteriorating business conditions including the adverse impact of COVID-19 and resulting future uncertainty.” Walgreens announced it would cut an additional 4,000 positions in the UK, or about 7% of the workforce, and close 48 Boots Optician stores.

Third-quarter net sales were roughly flat over last year at $34.63 billion. The company estimated the Covid-19 impact on sales to be as much as $750 million during the quarter.

7:19 a.m. ET Thursday: Stocks mixed, Nasdaq holds higher

Here were the main moves in markets, as of 7:19 a.m. ET:

  • S&P 500 futures (ES=F): 3,167.75, up 4.25 points or 0.13%

  • Dow futures (YM=F): 26,014.00, up 45 points, or 0.17%

  • Nasdaq futures (NQ=F): 10,682.5, up 20.25 points, or 0.19%

  • Crude (CL=F): +$0.22 (+0.54%) to $40.84 a barrel

  • Gold (GC=F): +$8.30 (+0.46%) to $1,818.20 per ounce

  • 10-year Treasury (^TNX): +0.3 bps to yield 0.6530%

6:03 p.m. ET Wednesday: Stocks extend gains in late trading

Here were the main moves at the start of the overnight session for U.S. equity futures, as of 6:03 p.m. ET:

  • S&P 500 futures (ES=F): 3,167.75, up 4.25 points or 0.13%

  • Dow futures (YM=F): 26,014.00, up 45 points, or 0.17%

  • Nasdaq futures (NQ=F): 10,682.5, up 20.25 points, or 0.19%

A trader walks in front of the New York Stock Exchange (NYSE) on May 26, 2020 at Wall Street in New York City. – Wall Street stocks surged early May 26, 2020 on optimism about coronavirus vaccines as the New York Stock Exchange resumed physical floor trading for the first time since late March. About five minutes into trading, the Dow Jones Industrial Average was up 2.3 percent at 25,023.76. The broad-based S&P 500 gained 2.0 percent to 3,013.04, while the tech-rich Nasdaq Composite Index advanced 1.6 percent to 9,468.96.The gains came after a ceremony presided over by New York Governor Andrew Cuomo, who wore a mask as he rung the opening bell to signal the start of the day for traders, also clad in masks and separated by plexiglas. (Photo by Johannes EISELE / AFP) (Photo by JOHANNES EISELE/AFP via Getty Images)

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