5 Keys to Wall Street by Investing.com

Investing.com – Tech giants Apple (NASDAQ:) and Amazon (NASDAQ:) posted better-than-expected results, despite lower consumer spending hurting both companies’ bottom line. Meanwhile, the key U.S. labor market report for July is due out on Friday, and traders are hoping the numbers can give some indication of where the Federal Reserve’s interest rate policy will go next. Here are five key questions to watch out for this Friday, August 4th in the financial markets.

1. Futures rose after receiving new profits from large technology companies.

U.S. stock futures rose on Friday, led by the bourse, as investors assess the performance of the two tech giants and prepare for the release of an important monthly jobs report.

At 11:11 am ET (11:11 am ET), the contract was up 65 points or 0.20%, 18 points or 0.40% and 88 points or 0.57%.

On the other hand, the US July report will be released this Friday at 14:30 (CET). Everything points to data that could influence the upcoming decisions of the Federal Reserve on monetary policy, showing that the world’s largest economy created fewer jobs during the month.

2. Apple profits beat expectations despite falling hardware sales

Apple reported higher-than-expected quarterly revenue thanks in part to strong demand for services, but revenue continued to fall as consumers held back spending on gadgets from the iPhone and iPad maker.

Net income increased 2.3% in the second quarter from a year earlier to $19.9 billion, despite Wall Street estimates that it was down 3.6% to $18.7 billion. Earnings per share of $1.26 also beat Bloomberg’s expectations of $1.20.

Behind these results is Apple’s services division, which includes a range of digital offerings such as Apple Music and iCloud. Revenue from this segment rose 8% year-on-year to a record $21.2 billion on the back of 150 million new subscribers.

3. Cloud Storage Sustainability Boosts Amazon Profits

Growth in Amazon’s cloud computing division slowed less than expected in 2019, giving hope that the much-maligned division will soon hit a reversal after a recent downturn.

The business known as Amazon Web Services reported 12% revenue growth in the second quarter. The Bloomberg consensus forecasts growth of 9.48%.

Amazon previously warned that AWS revenue fell to 11% in April from 16% in the first quarter and 29% in 2022, a trend largely due to lower customer IT spending.

Amazon shares rise sharply ahead of the market opening.

4. US Employment Report

US employment growth is expected to slow to its lowest level since 2020 as a prolonged series of aggressive US interest rate hikes hurt the labor market.

Economists predict that the United States added 200,000 jobs for the month as a whole, compared to 209,000 in June, while the economy’s growth rate will also slow from 0.4% to 0.3% on a monthly basis.

Easing a tight labor market was one of the main tenets of the Federal Reserve’s latest rate hike cycle, arguing that cooling labor demand and rising wages could help curb high inflation.

However, it is forecast to remain unchanged at 3.6%, which suggests that the labor market remains strong.

5. Crude oil prices rise as Saudi Arabia and Russia announce further production cuts

Oil prices rose on Friday after major producers Saudi Arabia and Russia announced further production cuts, indicating further cuts in global supplies.

Saudi Arabia on Thursday extended a voluntary cut in oil production by 1 million barrels a day until the end of September, while Russia also said it would cut oil exports by 300,000 barrels a day next month.

These cuts come just before the meeting of the Organization of the Petroleum Exporting Countries and its allies, which is held towards the end of the day, making further cuts by the group unlikely.

By 11:10 am ET (10:10 am ET), crude oil futures were up 0.5% to $81.98 a barrel, while the contract was up 0.5% to $85.54 a barrel. Both benchmark oils are up for the sixth week in a row.