Investing.com -- Wall Street futures are drifting lower Thursday ahead of the release of the weekly jobless claims data. Apple is in the spotlight over claims it could charge for its AI product, while the impact of the global carry trade remains in focus.
1. Futures slip lower
U.S. stock futures edged lower Thursday, stabilizing to a degree following several dramatic swings in recent days.
By 04:15 ET (08:15 GMT), the Dow futures contract was 100 points, or 0.3%, lower, S&P 500 futures dropped 15 points, or 0.3%, and Nasdaq 100 futures fell by 32 points, or 0.2%.
The Wall Street indices closed lower Wednesday, unable to hold an early rally, the blue chip Dow Jones Industrial Average closing over 200 points, or 0.6%, lower, while both the broad-based S&P 500 dropped 0.8% and the tech-heavy Nasdaq Composite fell 1.1%.
There are more earnings to digest Thursday, including from drugmaker Eli Lilly (NYSE:LLY) and fashion retailer Under Armour (NYSE:UA).
Additionally, Bumble (NASDAQ:BMBL) stock slumped 30% premarket after the online dating agency cut its annual revenue growth forecast, sparking worries about its growth plans.
Warner Bros Discovery (NASDAQ:WBD) stock fell almost 10% premarket after the entertainment giant reported a quarterly net loss of $10 billion, announcing it has written down the value of its traditional television networks by $9.1bn, a dramatic recognition of how fast streaming is eroding the cable business model.
2. Jobless claims in focus
Worries about a U.S. hard landing, after Friday’s weak nonfarm payrolls release, sparked the sharp selloff on Wall Street.
With this in mind, the macro spotlight is squarely on the weekly jobless claims figures out of the U.S. later in the day, with economists expecting initial jobless claims to total 241,000 last week, a small reduction from the prior week’s 249,000.
That release showed the number of Americans filing new applications for unemployment benefits increased to an 11-month high last week, adding to fears that the labor market was cooling quickly.
The report from the Labor Department on Thursday also showed the number of people on jobless rolls swelling in mid-July to the highest level since late 2021.
Federal Reserve Chair Jerome Powell said last week that while he viewed the changes in the labor market as "broadly consistent with a normalization process," policymakers were "closely monitoring to see whether it starts to show signs that it's more than that."
3. 75% of carry trade removed - JPMorgan (NYSE:JPM)
One of the main contributors to the market turmoil of the last few days has been the unwinding of the global carry trade - which involves investors borrowing money in a place where interest rates are low and using it to invest elsewhere in assets that generate a higher return.
For years this has widely involved the Japanese yen, as the Bank of Japan has held interest rates near zero in an attempt to stimulate a stagnant economy.
However, the BOJ raised interest rates last week, while rates are already falling in a number of other regions while the Federal Reserve has signaled that it may join this club next month.
Analysts at JPMorgan said in a note that the risk-reward for global carry is low due to U.S. elections and potential repricing of funders on lower U.S. rates and rates momentum is expected to turn more significantly against G10 carry which favors the rotation to value.
It added carry baskets have already suffered a significant drawdown following the tech sell-off, and the spot component of the global carry basket suggests that 75% of carry trades have been removed.
4. Apple could charge users $20 for AI product
Apple (NASDAQ:AAPL) expressed optimism over its iPhone sales going forward at its latest quarterly release, as it expects additional features based on artificial intelligence to attract buyers.
The tech giant is expected to launch this fall what analysts have called the biggest software upgrade for the iPhone, including artificial intelligence features - known as Apple Intelligence.
Apple could charge its users up to $20 for its advanced artificial intelligence features, analysts told CNBC, as the company looks to boost the growth of its lucrative services business.
Apple’s services division brought in $24.2 billion in the June quarter, making it unique as many other hardware firms have not managed to monetize software.
It is not unusual for technology firms to charge for their AI offerings. OpenAI, for example, has a subscription fee for more advanced ChatGPT features and Microsoft (NASDAQ:MSFT) charges for its AI Copilot tool.
5. Crude falls on weak Chinese import data
Crude prices retreated Thursday, on course to end a two-day winning streak, as dismal economic data from top oil importer China reignited concerns surrounding global demand.
By 04:15 ET, the U.S. crude futures (WTI) dropped 0.1% to $75.19 a barrel, while the Brent contract fell 0.2% to $78.21 a barrel.
Data released earlier Thursday showed China imported around 10 million barrels of oil in July, down 12% from June and 3% lower than the same period last year.
Concerns over Chinese growth, coupled with fears of a U.S. recession, have weighed heavily on oil prices in recent sessions.
Both benchmarks had gained around 3% over the last two sessions, bouncing off near-2024 lows, helped by the simmering tensions in the Middle East.
Additionally, crude inventories in the United States, the world's largest oil consumer, fell 3.7 million barrels, data showed, marking a sixth straight weekly decline to six-month lows.