US pre-open: Futures edge lower as focus shifts to employment cost and business confidence data

US stock futures edged lower on Friday, as investors awaited earnings from oil heavyweights.

The Dow Jones Industrial Average is expected to open approximately 29 points down, while the S&P 500 and the Nasdaq are set to begin the final session of the week four and eight points down.

Friday data

On Friday, investors will analyse a report on the employment-cost index for the second quarter, which is released at 1330 BST.

“If businesses are paying more for labour, it’s clearly a good indication of wage inflation but also, these cost increases are likely to be passed on to the end consumer in the form of price increases,” said Oanda’s senior market analyst Craig Erlam.

“Given that the Fed is clearly seeking evidence of inflationary pressures to compensate for the deflationary impact of falling commodity prices, this and other similar measures could be key.”

A reading on July business conditions in the Chicago area is on tap at 1445 BST, followed the University of Michigan gauge of consumer confident at 1500 BST.

Elsewhere, China’s stocks rallied near the end of the week but still closed lower as government measures intended to lift the market waned, while European stocks flitted between small gains and losses in fairly quiet trade.

The dollar rose 0.27% and 0.18% against the pound and the yen respectively but fell 0.31% against the yen, while gold futures dropped 0.75% to $1,080.20.

Oil prices plummeted, with West Texas Intermediate losing 1.85% to $47.64 a barrel, while Brent crude lost 1.16% to $52.70 a barrel.

Earnings in focus

In company news, oil giants Exxon Oil and Chevron will report ahead of the bell.

Food retailer Whole Foods slid 2.99% in pre-market trading after analysts at Imperial Capital cut to the price target on the stock from $65 to $53.

Internet network LinkedIn plunged 6.33% ahead of the bell after the group posted a $67.7m net loss in the second quarter, compared with $1m last year.

“The net loss of $67.7m is much larger than last year’s $1m, largely because of costs associated with its recent acquisition of Lynda.com,” said Jasper Lawler, analysts at CMC Markets.

“The bigger worry is a trend of high expenditure not being matched by high enough growth to justify the very high valuation of social media stocks.”

Expedia jumped 8.31% after posting better-than-expected second quarter results late on Thursday night, while Coca-Cola Enterprises surged 8.6% ahead of the bell after plans for a tie-up in operations were revealed by the Wall Street Journal.