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DJIA Futures: -86 (-0.3%)

SPX Futures: -33 (-0.7%)

NASDAQ Futures: -197 (-1.3%)

Good morning friends!

Futures are falling as traders remain focused on interest rates.

Let’s get right to it!

Weekly Jobless Claims Drop

Weekly jobs claims fell unexpectedly again last week. 

The Labor Department reported 216,000 Americans filed initial claims for unemployment benefits. 

That was down by 12,000 from the week before and lower than expectations for claims to rise to 233,000.

It was the lowest level of claims since February.

Continuing claims fell by 36,000 to 1.68 million in the week ending August 26 vs 1.72 million expected.

Q2 Productivity Revised Down, Labor Costs Revised Up

Unit labor costs during the second quarter were revised higher while worker productivity was revised down. 

The Bureau of Labor Statistics reported labor costs rose 2.2% in Q2, up from the first estimate of 1.6%. 

That was down from the 3.3% increase in Q1. 

The higher costs included a 5.7% increase in hourly compensation.

Q2 productivity increased 3.5%, down from the 3.7% initial estimate and lower than 3.8% expected. 

That change included a 0.5% downward revision to output and 0.2% downward revision to hours worked.

GameStop Drops Despite Earnings Beat

GameStop (GME) shares are down 1.9% ahead of the open despite beating  Q2 expectations on the top and bottom line. 

Here’s how the video game retailer’s results compared to analysts’ estimates: 

  • Loss per share: $0.03 vs $0.14 expected
  • Revenue: $1.16 billion vs $1.14 billion expected

GameStop’s expenses decreased to 27.7% of net sales vs 34.1% a year ago. 

The stock originally jumped in after-hours trading after the results on Wednesday but has since pulled back.

AI Plunges

C3.ai (AI) shares are tumbling 13.3% in premarket trade after beating fiscal Q1 expectations but issuing weak guidance. 

Here’s how the artificial intelligence software company’s results compared to analysts’ estimates: 

  • Adjusted loss per share: $0.09 vs $0.17 expected
  • Revenue: $72.4 million vs $71.6 million

For the fiscal second-quarter, C3.ai called for an operating loss between $27 million and $40 million. 

That was sharply higher than analysts’ expectations for a $26.6 million loss.

The company also withdrew its forecast to reach non-GAAP profitability by the end of this fiscal year. 

The CEO said, “After careful consideration with our leadership and our marketing partners, we have made the decision to invest in lead generation, branding, market awareness, and customer success related to our Generative AI solutions.”

In Case You Missed It

  • The Fed’s latest Beige Book was released Wednesday afternoon, saying, “Contacts from most Districts indicated economic growth was modest during July and August.” Consumer spending on tourism was stronger than expected during the period while other spending slowed. The survey said job growth was subdued across the nation and most districts expect wage growth to slow broadly in the months ahead. Respondents said price growth slowed overall as businesses struggle to pass along cost pressures to consumers. That resulted in lower profit margins across several districts.
  • Activity in the U.S. services sector was stronger than expected in August. The Institute for Supply Management’s services PMI rose unexpectedly to 54.5% last month vs 52.5% expected. That reading was up by 1.8% from July. It was the eight consecutive month of positive readings, with any reading above 50 signaling growth in the sector. The business activity index rose 0.2% to 57.3% and the new orders index increased 2.5% to 57.5%.

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