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Top 5 Things to Know in the Market on Friday

5 key factors for the markets on Friday

Investing.com - Here are the top five things you need to know in financial markets on Friday, June 29:

1. Global stocks get trade respite, trade higher

World stocks enjoyed a strong bounce on Friday as a recovery in Asian markets spread to European shares after a turbulent week of selling as investors' fears of higher barriers to trade came closer to becoming reality.

Trade wars have already mauled assets from the Chinese yuan to European automaker stocks, and wiped $1.75 trillion off world stocks' market capitalization since June 12.

European shares strongly rose on Friday, with major indices up more than 1%. However, European indices will however probably close on a loss for the week and the month as the escalation of the United States' trade dispute with China and the European Union took its toll.

Asian markets rallied from nine-month lows as China eased foreign investment limits and provided investors a temporary respite to trade war fears. However, even as China’s Shanghai Composed jumped more than 2%, the Chinese yuan suffered its worst month on record, losing 3% against the dollar in June as investors pulled money from a market likely to suffer from higher barriers to trade.

U.S. stocks look set for a recovery on Friday even though the Dow was on track for a weekly decline of close to 1.5%. At 5:48AM ET (9:48GMT), the blue-chip Dow futures gained 146 points, or 0.60%, S&P 500 futures rose 12 points, or 0.44%, while the Nasdaq 100 futures traded up 39 points, or 0.55%.

2. Stress test results send most bank stocks higher

Several U.S. banks were registering strong gains in pre-market trade on Friday as they passed tougher Federal Reserve stress tests who results were published after the prior session close.

Although the Fed forced some of Wall Street’s top banks to rein in ambitious plans for pouring out cash to shareholders, it still implied a record payout to investors.

The nation’s four largest lenders - JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) - all said they will distribute more than $110 billion through dividends and stock buybacks.

Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) were blocked from boosting total payouts.

Of the 18 domestic and foreign banks that faced the qualitative section of the exam, Deutsche Bank (DE:DBKGn) was the only one to receive an objection.

3. Data dump to round out the week

A regional U.S. manufacturing report, consumer sentiment data and crucial update on the Fed's preferred measure of inflation will round off this week's release of top-tier economic data on Friday.

The Core Price Consumer Expenditure (PCE) Index due 8:30AM ET (12:30GMT) – the Fed’s preferred measure of inflation – is expected to show 0.2% growth for May and 1.9% growth year-on-year, up slightly from 1.8% the prior month.

The PCE deflator data, a measure of inflation based on changes in personal consumption, will also be in focus after rising 2% in April.

The Chicago Purchasing Managers' Index (PMI) due 9:45AM ET (13:45GMT) is expected to show a reading of 60.1, down from a prior reading of 62.7. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction.

Michigan’s consumer sentiment index due 10:00AM ET (14:00GMT) is forecast to show a reading of 99.1 roughly unchanged from the previous month, while consumer expectations data will also be in focus.

Economic data so far this week has played second fiddle to trade-related headlines but a slowdown in U.S. economic growth reported Thursday weighed on sentiment somewhat.

4. Nike soars 10% after quarterly earnings

Shares of Nike (NYSE:NKE) soared nearly 10% in pre-market trade on Friday after the iconic athletic wear company reported quarterly sales of $9.79 billion, beating analysts' estimates of $9.41 billion, thanks to new product launches.

Nike also announced after Thursday’s close a four-year $15 billion buyback plan.

In other positive earnings news, KB Home (NYSE:KBH) gained 4.2% in after-hours trading as the homebuilder reported quarterly results that beat on the top and bottom lines.

5. Oil prices trade higher with focus on U.S. production

Oil prices moved higher on Friday as investors looked ahead to data gauging U.S. output.

The weekly instalment of drilling activity from Baker Hughes, out later on Friday, showed the prior week that the number of U.S. oil rigs fell for the first time in weeks, pointing to signs of tightening in U.S. output, although the number remains just below the March 2015 high registered in the prior week.

U.S. oil output, however, remains at record levels of about 10.9 million barrels per day, the Energy Information Administration said Wednesday.

Market participants will also monitor any potential updates on U.S. sanctions on the back of concerns that the United States may allow some countries to continue importing Iranian crude imports.

Oil surged this week by the most in two months as Saudi Arabia’s assurance of increased output failed to assuage concerns that disruptions from Canada to Libya and Iran will strain global markets.

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