1. Big Banks Report Earnings
Results from the four big banks are expected before the opening bell on Friday. Investors are waiting to see if bank stocks remain a safe haven after the volatile week in the stock market, as JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C) kick off the start of third quarter earnings results.
Analysts expect JPMorgan to report earnings per share of $2.27 on revenue of $27.58 billion, while Citigroup is expected to announce $1.67 earnings per share on revenue of $18.45 billion. Meanwhile Wells Fargo is expected to show earnings per share of $1.19 and $21.82 billion in revenue.
2. Stocks Recover From Volatile Week
Global stocks were poised to recover on Friday, with Wall Street set to open higher after closing in the red all week as U.S. inflation slowed in September. The S&P 500 futures rose 0.92% while Dow futures gained 0.80% and tech heavy Nasdaq 100 futures increased 1.60%. Data on Thursday showed that consumer prices rose less than expected in September, as underlying inflation pressures appeared to cool slightly.
Meanwhile U.S. President Donald Trump blamed the Federal Reserve’s uptick in interest rates for the fall in stock prices. “It’s a correction that we’ve been waiting for for a long time, but I really disagree with what the Fed is doing,” he said Wednesday.
Trading in Europe was higher, with the DAX, FTSE 100 and CAC 40 all in the green.
Meanwhile in Asia, stocks closed higher. In Hong Kong, the Hang Seng rose 2.12% and the China A50 Index increased 2.47%. The Shanghai Composite was up 0.91% while in Japan, the TOPIX inched up 0.03% and the Nikkei 225 gained 0.56%.
3. UK Closes in on Brexit Deal
The UK is closing in on a deal with the European Union to leave, the Financial Times reported. Prime Minister Theresa May has told her cabinet that her negotiation team is close to finalizing the UK’s divorce from the EU, including the Irish border. Settling the Irish backstop issue over whether or not Northern Ireland remains in the single market or if the country imposes a hard border has been one of the biggest hurdles in negotiations. Cable reversed on earlier gains, with GBP/USD falling to 1.3215.
4. U.S. Dollar Recovers Slightly
The greenback gained some strength on Friday, as investors gained back confidence in the U.S. economy after inflation data on Thursday. The U.S. dollar index, which tracks the greenback against a basket of other currencies, was at 94.77 but was not far from a two-week low of 94.67. The dollar had fallen this week as a sell-off in equities and increasing bond yields put pressure on the greenback.
5. Oil Prices Rise on Oversupply Fears
Oil prices rose on Friday as an increase in stockpile data increased concerns about a global oversupply as demand for oil wanes. Data on Thursday showed that inventories in the U.S. continue to rise more than expected, leading to a concern of oversupply. U.S. crude inventories rose by 6 million barrels last week, compared with the general consensus of a 2.6 million-barrel increase, the EIA reported on Thursday.
A week earlier the agency reported 8-million barrel rise in U.S. crude stocks. Meanwhile the Organization of the Petroleum Exporting Countries cut its oil demand growth estimates for 2018 and 2019 in its monthly report on Thursday.
The organization revised its global oil demand growth to 1.54 million barrels per day this year, down by 80,000 bpd. Potential headwinds to global economic growth was cited as the reason for the downgrade. The weekly U.S. Baker Hughes oil rig count, which is a leading indicator of demand for oil products, comes out later in the session.