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, Feb. 15:

1. U.S.-China trade talks drag on

U.S. Treasury Secretary Steven Mnuchin said Friday that trade talks between Washington and Beijing had been “productive”, but provided no details apart from the description.

As high level talks wound up in Beijing, several media reports cited sources that said little progress had been made on major issues that could pave the way for a meeting between the two countries.

Having finished discussions with the Chinese Vice-Premier Liu He, The New York Times reported that Mnuchin and U.S. Trade Representative Robert Lighthizer will meet with Chinese President Xi Jinping later on Friday.

Speculation pointed to the possibility that the three may discuss holding a summit between Xi and U.S. President Donald Trump in the near future.

Separately, the South China Morning Post reported that high-level trade talks would continue in Washington next week.

2. Global stocks mixed as economic weakness weighs

Global stocks showed mixed signs on Friday as the reported lack of progress in U.S.-Sino trade talks weighed and weak Chinese data added to disappointing U.S. retail sales released a day earlier.

Asian stocks bore the brunt of the selloff as weak Chinese inflation data increased concern over deflationary pressures in the world’s second largest economy. China’s consumer price inflation unexpectedly slowed, while factory-gate inflation hit its weakest level since September 2016. China’s Shanghai Composite closed down 1.4% while Japan’s Nikkei 225 ended 1.2% lower.

Elsewhere, European bourses struggled to remain afloat in morning trade, but gains in the region’s telecoms and industrials helped push indices higher by midday on the Old Continent. Germany’s DAX trailed its peers as the country’s Ifo Institute warned that proposed U.S. auto tariffs could cut German car exports in half.

U.S. futures pointed to a flat open as investors held out after the largest drop in retail sales in nine years. At 5:50 AM ET (10:50 GMT), the blue-chip Dow futures inched up 19 points, or 0.07%, S&P 500 futures edged forward 2 points, or 0.09%, while the Nasdaq 100 futures advanced 4 points, or 0.05%.

Read more: What Happens When More QE Fails To Reverse The Recession? - Charles Hugh Smith

3. U.S. consumer confidence in focus after retail sales plunged

After Thursday’s surprise tumble in retail sales for December, the market will be anxious to receive the latest consumer confidence figures. The University of Michigan will release its preliminary measure of its February consumer sentiment index at 10:00 AM ET (15:00 GMT).

Consumer sentiment is expected to improve, recovering from the near-two-year low caused largely by the partial government shutdown.

The reading takes on particular significance after data showed Thursday that retail sales - equivalent to approximately 70% of the American economy - registered their largest decline in nine years.

Ahead of the confidence survey, the New York Fed will issue its measure of manufacturing in the New York region at 8:30 AM ET (13:30 GMT).

4. Pepsi and Deere step up on the earnings calendar

Earnings will remain in the spotlight in Friday’s trade as PepsiCo (NASDAQ:PEP) and Deere (NYSE:DE) take the spotlight ahead of the open in the latest string of results for the fourth-quarter reporting period. Pepsi raised its dividend but forecast a 1% drop in underlying earnings this year before a rebound in 2020.

With 386 of the S&P 500 firms having already reported earnings, analysts at The Earning Scout warned that beat rates are below normal as growth has slowed and companies overall are lowering their guidance.

Chipmakers reporting after Thursday’s close gave mixed signals.

Shares of NVIDIA (NASDAQ:NVDA) soared 5% in premarket trade Friday as investors celebrated a profit beat and its full-year sales outlook topped consensus. but Applied Materials (NASDAQ:AMAT) had fallen around 1.5% in extended trading as its guidance for current quarter profit missed estimates.

5. Trump to declare national emergency

Trump is scheduled to speak at 10:00 AM ET (15:00 GMT) Friday where White House Press Secretary Sarah Huckabee Sanders confirmed he would sign legislation to avoid a government shutdown and would also declare a national emergency in order to build a southern border wall with Mexico.

An emergency declaration would allow Trump to redirect the funds for the wall which were not included in the spending bill approved by Congress.

Democratic House Speaker Nancy Pelosi told reporters Thursday that she was reviewing her options in the hopes of filing a legal challenge to Trump’s declaration of a national emergency.

“This is not an emergency, and the president's fearmongering doesn't make it one,” she explained in a joint statement with Senate Minority Leader Chuck Schumer.

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