Stocks – U.S. Futures Point Lower; Caution Sets in Ahead of Payrolls

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By Peter Nurse – U.S. stocks are set to open a touch lower Friday, with investors set to pause for breath after record closing levels as China’s coronavirus outbreak continues to claim victims and cause economic damage. Eyes will also be on the continuing earnings season and the key employment report.

At 6:55 AM ET (1155 GMT), futures for the traded 12 points, or 0.4%, lower, futures for the down 38 points, or 0.4%, while the futures contract fell 116 points, or 0.4%.

Earlier Friday, the death toll from the coronavirus in China reached 636, including the death of a Chinese doctor who tried to warn about the coronavirus outbreak, while the number of recorded cases rose above 31,000. And the World Health Organization warned that it was “too early” to declare a peak in the spread of the new disease.

S&P Global (NYSE:) Ratings cut its Chinese 2020 growth forecast to 5%, from 5.7%, saying the impact of the coronavirus outbreak could take a heavy short-term toll.

This has prompted caution on Wall Street Friday, after the three major U.S. averages closed Thursday in record territory. The ended up 0.3%, the up 0.7% and the was 0.3% higher.

The earnings season will continue Friday, and it has generally been a positive one. Around 60% of the S&P 500 companies have so far reported, with over 70% of these beating expectations.

Ride-hailing company Uber (NYSE:) will be in focus after it reported a loss of $1.1 billion in the last three months of 2019. However, revenue jumped 37% to $4 billion and the number of trips made on its platform rose by 28%, with the company showing signs of moving toward profitability. Uber stock traded around 7% higher premarket.

Pinterest stock (NYSE:) climbed over 16% premarket after the social networking company beat on both the top and bottom lines for the fourth quarter and gave upbeat guidance for the full year.

AbbVie (NYSE:) will also report its latest quarterly numbers, with the biopharmaceutical company expected to report earnings of $2.19 per share on revenue of $8.70 billion.

Johnson & Johnson (NYSE:) will be eyed after a New Jersey state jury ordered the corporation to pay $750 million in punitive damages to four people who said they had been hit by a rare form of cancer through the use of the company’s talcum powders.

Goldman Sachs (NYSE:) will also be of interest after Reuters reported that the investment banking giant plans to raise $8 billion in only its second buyout fund since the 2008 financial crisis.

The key data release Friday will be the U.S. Labor Department’s closely watched monthly , at 08:30 AM ET (1330 GMT), which is expected to show nonfarm payrolls increased by 160,000 jobs in January.

The risk is for a surprise to the upside, as this estimate predates ADP’s release on Wednesday, which showed private payrolls increased by 291,000 jobs in January, the most since May 2015.

Elsewhere, oil headed for a fifth weekly loss as doubts remain over the extent of production cuts from the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+.

A committee of technical experts from the group Thursday recommended a production cut of 600,000 barrels a day to offset the demand impact from the coronavirus outbreak, but Russia asked for more time to assess the impact of the outbreak.

Russian Foreign Minister Sergei Lavrov has since said his country supports a recommendation to deepen OPEC+ global oil supply curbs, but didn’t mention by how much.

AT 06:55 AM ET (1155 GMT), futures traded 0.7% lower at $50.61 and the international benchmark contract rose 0.5% to $54.66.

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