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ISM manufacturing, ExxonMobil, Chevron earnings: What to know in markets Friday

Heidi Chung

Key manufacturing data and ExxonMobil (XOM) and Chevron (CVX) earnings take centerstage Friday to close out a busy week.

The Institute for Supply Management’s manufacturing report for April is expected to show that manufacturing activity during the month contracted further to 37.0 from 49.1 in March.

“As COVID-19 spread across the US, many non-essential factories as well as most auto plants in the U.S. remained closed. Business surveys for early April indicated continued deterioration in the near-term outlook as temporary closures weighed on activity,” Nomura economist Lewis Alexander wrote in a note to clients April 24. “Beyond April, we expect the easing of social distancing measures to be very gradual, potentially resulting in subdued business sentiment in the near term. Sluggish external growth, in addition to elevated domestic business uncertainty, will continue to weigh on business fixed investment. Moreover, record-low crude oil prices pose additional challenges to the US industrial sector outlook.”

A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008. A big chunk of U.S. energy production shuttered by Hurricane Ike could recover quickly amid early indications the storm caused only minor to moderate damage to platforms and coastal refineries. REUTERS/Jessica Rinaldi (UNITED STATES)

Meanwhile on the earnings calendar, integrated oil giants ExxonMobil and Chevron will be delivering first quarter results ahead of the opening bell. Exxon is expected to report adjusted earnings of under one cent on $50.83 billion in revenue, while Chevron is estimated to report adjusted earnings of 66 cents per share on $31.10 billion in revenue.

Recent volatility in the oil market has been hammering energy companies. On April 7, Exxon issued a profit warning, and Wednesday the company announced that it would be freezing its dividend for the first time in 13 years. Meanwhile, just over a month ago, Chevron announced that it would be halting share buybacks and lowered its capital spending by 20%.

Shares of both ExxonMobil and Chevron have severely underperformed the broader market. Exxon stock has plummeted 32% so far in 2020, while Chevron has sunk 22% and the S&P 500 (^GSPC) has fallen 9%.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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