Top 5 Things to Know in the Market on Friday
Investing.com - Here are the top five things you need to know in financial markets on Friday, June 22:
1. Oil climbs while OPEC meets
Oil moved higher on Friday with the Organization of Petroleum Exporting Countries gathered at their official meeting in Vienna.
Members are discussing the possibility of a production boost to counteract drops in supply from Iran and Venezuela, but the actual amount is unclear. Saudi Arabia and Russia were in favor of increasing output by perhaps one million barrels per day, but Iran, Iraq and Venezuela are all opposed.
Saudi Arabian energy minister Khalid al-Falih said on Friday that OPEC and non-OPEC members were close to agreeing on a deal to raise oil production.
The meeting started approximately one hour later than planned, reportedly due to discussions on reaching a deal between Saudi Arabia and Iran.
A press conference was tentatively scheduled for 7:00AM ET (11:00GMT), although a final decision may not arrive until Saturday when OPEC officials are scheduled to meet with their non-member allies who formed part of the 18-month accord to curb production by 1.8 million barrels per day.
2. Trade worries remain in focus
Following on the back of German automaker Daimler Chrysler’s profit warning on Thursday, that was sparked by tariff concerns, trade worries remained in focus on Friday.
The European Union’s tariffs on some $3.2 billion worth of US goods went into effect on Friday.
The levies are in retaliation for tariffs the U.S. imposed on imported steel and aluminum earlier this month and are directed at American products, including a 25% tariff on whiskey, tobacco, Harley Davidson motorcycles and peanut butter or 50% on select items such as footwear, some types of clothing, and washing machines.
There is a risk of a further deterioration in relations on June 30, when Washington is due to announce a plan to restrict Chinese investments into the U.S. and limit exports of American tech products to the world’s second largest economy.
3. Stocks mostly higher at end of tumultuous week
Global equities traded higher on Friday but were still on track for their worst weekly losses in three months as growing trade worries continued to pummel stocks.
European shares were mostly higher on Friday as positive private sector business activity data offered a sigh of relief at the end of a tumultuous week.
Asian stock markets closed mix with Japan leading declines. The Nikkei 225 ended down 0.7%.
U.S. futures meanwhile pointed to a higher open as investors looked ahead to economic data. At 6:06AM ET (10:06GMT), the blue-chip Dow futures gained 97 points, or 0.40%, S&P 500 futures rose 12 points, or 0.43%, while the Nasdaq 100 futures traded up 26 points, or 0.36%.
4. U.S. private sector activity on tap
An update on both the U.S. manufacturing and services sector rounds off the week of top-tier economic data.
The manufacturing purchasing managers' index (PMI) at 9:45AM ET is forecast to show a preliminary reading of 56.3 for June, while the services PMI is expected to show a reading of 56.4.
Economic data so far this week has largely taken a backseat amid escalating trade war concerns as both the U.S. and China were embroiled in a tit-for-tat tariff spat.
5. Europe grants debt relief to Greece
Euro zone creditors finally agreed a debt relief deal that will help Greece exit its bailout program.
The country has been living primarily on money borrowed from euro zone governments in three bailouts since 2010, when it lost market access because of a ballooning budget deficit, huge public debt and an inefficient economy and welfare system
Following late-night talks in Luxembourg, the Eurogroup agreed to hand Greece a final loan tranche of €15 billion ($17.5 billion).
That will provide Athens with a cash reserve of around €24 billion ($27.9 billion) as it returns to the financial markets in August.
The agreement also means the repayment of €96 billion ($111.7 billion) of bailout loans - equivalent to about 40%t of the total Greece needs to repay the Euro zone over the coming decades - will be pushed back 10 years. The earliest repayment deadlines shift from 2023 to 2033 .
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