Dow Jones futures edge higher on upbeat Netflix’s earnings, Michigan sentiment data eyed

Dow Jones futures tick up on strong second-quarter earnings show from streaming giant Netflix.
Investors await quarter earnings from American Express and 3M, and flash Michigan sentiment data for July.
The Fed is almost certain to hold interest rates steady in the policy meeting later this month.

Sagar Dua FXStreet

Dow Jones futures trade marginally higher during the European trading session, extend its winning streak for the third trading day on Friday. United States (US) equities are buoyed by strong second-quarter earnings show from the streaming platform company Netflix.

At the time of writing, Dow30 futures ticks up 0.13% to near 44,550, S&P 500 futures gain six points and rises above 6,300.

During closed market hours, the streaming giant trades 1.9% higher to near $1,274. Revenues and Profit After Tax (PAT) margins of the company beat estimates, according to CNBC. “Year-over-year revenue growth was primarily a function of more members, higher subscription pricing and increased ad revenue,” the company said in a statement. Additionally, the firm has also raised revenue guidance for the current year to a range between $44.8 billion and $45.2 billion, slightly higher from $43.5-$44.5 billion, which it delivered in letter to shareholders following results of last quarter of 2024.

In Friday’s session, investors will closely monitor quarterly earnings from American Express and 2M.

Meanwhile, stronger-than-projected Retail Sales data for June has also improved demand for US equities. The Retail Sales data, a key measure of consumer spending, rose at a faster pace of 0.6% on month, compared to estimates of 0.1%. Upbeat US Retail Sales data signaled that the tariff-driven inflation has failed to restrict households’ spendings. In May, the consumer spending measure declined by 0.9%.

Going forward, market expectations for the Federal Reserve’s (Fed) monetary policy outlook will remain a key driver for the US indices.

According to the CME FedWatch tool, the probability for the Fed to cut interest rates in the September meeting has reduced to 58% from 70.4% seen a week ago. The tool also shows that the Fed is almost certain to leave interest rates steady in the range of 4.25%-4.50% in the policy meeting later this month.

Contrary to market expectations, Fed Governor Christopher Waller continues to argue in favor of reducing interest rates in the July policy meeting, citing downside risks to economy and labor market. “The Fed should cut interest rates 25 basis points at July meeting as rising risks to economy and employment favour easing policy rate,” Waller said.

On the data front, investors await preliminary Michigan Consumer Sentiment Index (CSI) data for July, which will be published at 14:00 GMT. The sentiment data is expected to have improved slightly to 61.5 from 60.7 in June, a scenario that is favorable for demand of US equities.

Economic Indicator

Michigan Consumer Sentiment Index

The Michigan Consumer Sentiment Index, released on a monthly basis by the University of Michigan, is a survey gauging sentiment among consumers in the United States. The questions cover three broad areas: personal finances, business conditions and buying conditions. The data shows a picture of whether or not consumers are willing to spend money, a key factor as consumer spending is a major driver of the US economy. The University of Michigan survey has proven to be an accurate indicator of the future course of the US economy. The survey publishes a preliminary, mid-month reading and a final print at the end of the month. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

Why it matters to traders?

Consumer exuberance can translate into greater spending and faster economic growth, implying a stronger labor market and a potential pick-up in inflation, helping turn the Fed hawkish. This survey’s popularity among analysts (mentioned more frequently than CB Consumer Confidence) is justified because the data here includes interviews conducted up to a day or two before the official release, making it a timely measure of consumer mood, but foremost because it gauges consumer attitudes on financial and income situations. Actual figures beating consensus tend to be USD bullish.

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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