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Futures Drop Amid Weak Private Payrolls, Q2 Earnings Solid

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U.S. stock futures drop in today’s pre-market after the benchmark S&P 500 posted its 44th closing high yesterday. The three major stock indexes — the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite — are currently hovering roughly 0.5% below their all-time highs.

Market participants are  cautious ahead of weekly jobless claims data this Thursday and non-farm payroll data for July this Friday. Meanwhile, the monthly survey conducted by Automatic Data Processing Inc. (ADP - Free Report) reported that the U.S. private sector added 330,000 jobs in July, well below the average estimate in the range of 653,000 to 690,000.

In the pre-market, the yield on the 10-Year U.S. Treasury Note pulled back to Monday's level of 1.15% (its five-month low), erasing yesterday's marginal gain. Considering the bond market,  several economists and financial experts have warned that the U.S. economic growth could slow down in the near future.

On the other hand, a large section of market researchers has pointed out that pent-up demand supported by sky-high personal savings, nationwide progress on COVID-19 vaccination, and the Biden administration's proposed investment plans should drive Wall Street.

On the earnings front, second-quarter results reported this morning show strength. Pharmacies and Drug Stores giant CVS Health Corp. (CVS - Free Report) came out with quarterly earnings of $2.42 per share, beating the Zacks Consensus Estimate of $2.07. The company posted revenues of $72.62 billion for the quarter ended June 2021, surpassing the Zacks Consensus Estimate by 3.34%. For a detailed analysis of CVS earnings, click here.

Leading consumer packaged food and beverage company The Kraft Heinz Co. (KHC - Free Report)   came out with quarterly earnings of $0.78 per share, beating the Zacks Consensus Estimate of $0.73. The company posted revenues of $6.62 billion for the quarter ended June 2021, surpassing the Zacks Consensus Estimate by 0.11%. For a detailed discussion on KHC earnings, click here.

Diversified global engineering and technology bigwig Emerson Electric Co. (EMR - Free Report) reported quarterly earnings of $1.09 per share, beating the Zacks Consensus Estimate of $0.98. The company posted revenues of $4.7 billion for the quarter ended June 2021, surpassing the Zacks Consensus Estimate by 2.07%. For knowing more on EMR earnings, click here.

Two important economic data will be released during today's trading season. The ISM Services Index for July, for which the consensus estimate is 60.5% slightly above June's reading of 60.1%. Any reading above 50% means expansion in services activities. The IHS Markit will also report a similar survey result.

U.S. Services PMIs will be necessary for analyzing how this sector is doing as most of the economy has already reopened. The services sector activities account for the bulk of the country's GDP.

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