Futures Show Positive Trend as Investors Regain Confidence

U.S. stock futures edged higher on Friday, fueled by a surprising drop in weekly jobless claims, which helped to steady Wall Street after Monday's significant selloff. As of 05:56 AM EDT, Dow futures were up 55 points (0.14%), S&P 500 futures had climbed 13.50 points (0.25%), and Nasdaq 100 futures were up 67 points (0.36%).

Thursday saw a strong rebound in the main indices: the Dow Jones Industrial Average surged nearly 700 points (1.8%), the S&P 500 jumped 2.3%, marking its best day since November 2022, and the Nasdaq Composite soared 2.9%. Despite this recovery, the indices are still down for the week, with the S&P 500 off 0.5% and both the Nasdaq and Dow down around 0.7%. The S&P 500 and Nasdaq are on track for their fourth consecutive losing week.

In individual stock news, Paramount Global (PARA) saw premarket gains after surpassing profit expectations and reporting its first quarterly profit from streaming in three years, even as it announced a 15% reduction in its U.S. workforce. Expedia (EXPE) also surged premarket after beating quarterly expectations, despite cautioning about a potential softening in travel demand. On the flip side, ELF Beauty (ELF) saw its stock slip after offering cautious guidance, even though it raised its annual sales and profit forecasts.

Disney's Bold New Investment in Entertainment

Walt Disney (DIS) is making a significant bet on its Entertainment division. Despite mixed results earlier this week, with warnings about weakness in its parks business, Disney+ and its other streaming services posted a profit for the first time. To capitalize on this success, Disney is committing at least $1 billion annually over the next five years for movie and TV production in the U.K., Europe, the Middle East, and Africa. This investment will support Disney+, National Geographic, and other TV productions. Disney CEO Bob Chapek aims to revitalize the company following substantial losses in streaming and traditional TV, alongside challenges faced by its film studio.

China Hits a Milestone with New Energy Vehicles

In a significant development, the Chinese auto market has reached a milestone: more than half of all vehicles sold in July were new energy vehicles (NEVs), including pure electric and plug-in hybrid cars. NEV sales accounted for a record 50.7% of total vehicle sales, a notable increase from 36% last year and just 7% three years ago. This surge is attributed to heavy investments in EV supply chains within China. In comparison, electric and hybrid vehicles made up 18% of sales in the U.S. during the first quarter of this year.

China's Inflation Data Reveals Unexpected Growth

China's Consumer Price Index (CPI) inflation grew by 0.5% year-on-year in July, surpassing expectations of 0.3% and up from the previous month's 0.2%. This uptick in inflation suggests a possible rebound in domestic demand following a series of unexpected interest rate cuts by the People’s Bank of China (PBOC). Conversely, Producer Price Index (PPI) inflation continued to contract for the 22nd consecutive month, though the pace of decline has slowed to 0.8%, better than the anticipated 0.9% drop.

Crude Oil Prices on Track for Weekly Gains

Crude oil prices saw a slight dip on Friday but are set for substantial weekly gains. As of 05:56 AM EDT, U.S. crude futures (WTI) were up 0.07% to $76.26 per barrel, and Brent crude fell 0.3% to $78.92 per barrel. Both benchmarks are expected to post gains of over 3% for the week, marking the first positive week in five. The rise in oil prices is supported by improved sentiment towards the U.S. economy, better-than-expected Chinese inflation data, and persistent geopolitical tensions. Recent significant attacks by Ukraine on Russia and ongoing fears of retaliation by Iran and Hamas against Israel have contributed to a higher risk premium in oil prices.