Top 5 Things to Know In the Market on Friday

Market makers work on the trading floor at IG Index in London, Britain January 14, 2016. REUTERS/Stefan Wermuth

Here are the top five things you need to know in financial markets on Friday, August 12:

1. China data underlines slowdown with IMF report ahead

China’s industrial production, retail sales and fixed asset investment for July all came in with weaker readings that missed consensus on Friday, indicating a weak start to the third quarter for the world’s second largest economy.

Despite the slowdown, investors appeared to hope that the weak readings would spur policy easing.

The data came ahead of the International Monetary Fund’s (IMF) assessment of the Chinese economy, scheduled for release at 13:00GMT, or 9:00AM ET.

2. Gauges of the U.S. consumer on tap

With the U.S. consumer having spurred most of the growth in the American economy in the second quarter, market participants were looking ahead to the first indications of how they were faring at the start of the third quarter.

July retail sales will be released at 12:30GMT, or 08:30AM ET, Friday. The consensus forecast is that the report will show retail sales rose 0.4% last month, after increasing 0.6% in June. Core sales are forecast to inch up 0.2%, after gaining 0.7% a month earlier.

That report will be followed by the preliminary Michigan consumer sentiment for August at 14:00GMT, or 10:00AM ET. Expectations are for it to rise to 91.5, from the prior month’s reading of 90.0.

3. Dollar flat as Fed comments back 2016 rate hike

While market participants awaited the aforementioned measures of the American consumer, the dollar was mostly unchanged against major rivals on Friday.

San Francisco Fed president John Williams said in an interview with the Washington Post published on Thursday that the Fed should raise rates this year because of improving labor market conditions and the likelihood that inflation is heading higher.

The remarks helped the dollar tick higher on Thursday as financial markets once again increased the odds that the Fed will increase rates. Fed fund futures discounted a 51.9% chance of tightening for the December meeting as of close of trade on Thursday, according to the CME Group’s FedWatch tool.

4. Rally in oil continues

Oil prices continued higher on Friday after a more than 4% surge in the prior session as investors shook off concern over the global supply glut.

Bullish sentiment was buoyed on Thursday by Saudi oil minister’s comments that producers could discuss action to stabilize output next month, while Genscape data showed that crude stockpiles at the Cushing hub fell 389,906 barrels.

Market participants looked ahead to data from oilfield services provider Baker Hughes to be released later on Friday. The number of rigs drilling for oil in the U.S. last week increased by seven to 381, the sixth consecutive weekly rise and the ninth increase in 10 weeks.

U.S. crude oil futures gained 0.30% to $43.62 at 9:55AM GMT, or 5:55AM ET, whileBrent oil traded up 0.24% to $46.15.

5. Global stocks mixed ahead of U.S. data

Global stocks were trading mixed on Friday while waiting for the consumer data out stateside.

Asian stocks were higher with sentiment bolstered by the record close on Wall Street Thursday and China’s weaker data spurring hopes of policy easing.

European stocks showed mixed trade on Friday as Eurozone gross domestic product (GDP) slowed as expected, while German growth beat estimates.

Meanwhile, U.S. futures traded flat, taking a breather of the record highs reached on Thursday. At 9:57AM GMT, or 5:57AM ET, the blue-chip Dow futures advanced 13 points, or 0.07%, S&P 500 futures edged forward 2 points, or 0.07%, while the Nasdaq 100 futuresinched up 2 points, or 0.04%.

 

Source: Investing.com

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