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, Dec. 28:

1. U.S. stocks set for end-of-year rally

U.S. futures pointed to a continuation of the rally after Wall Street staged its largest reversal since 2010. At 5:54 AM ET (10:54 GMT), the blue-chip Dow futures gained 104 points, or 0.45%, S&P 500 futures rose 13 points, or 0.51%, while the Nasdaq 100 futures traded up 27 points, or 0.40%.

As investors face 2019, concerns remain over political turmoil in Washington, unresolved trade issues between the U.S. and China, higher interest rates and a global economic slowdown.

Amid these worries, stocks were on track to register their worst month of December since 1931 and both the Dow and S&P 500 were down more than 6% for all of 2018, while the rout since a September peak has erased more than $7 trillion in stock value, according to Bloomberg.

Elsewhere, European shares followed the rally on Wall Street with gains, while Asian markets also closed in positive territory on Friday.

2. Safe haven assets attract interest amid global concerns

The safe haven yen and Swiss franc captured buying interest on Friday as investors remained cautious over riskier assets in the face of a waning global economy and geopolitical concerns.

Reports that U.S. President Donald Trump was considering banning American companies from using equipment made by China’s Huawei and ZTE (HK:0763) reminded investors of the difficult path to resolving the trade dispute between the world’s two largest economies.

Despite the U.S. dollar index showing little movement against major rivals, the greenback was down around 0.7% against both the yen and the Swiss franc.

Gold futures were little changed, although the precious metal shined with gains of more than 4% in December, a stark contrast to the losses seen in U.S. stocks.

3. Hopes of end to government shutdown shift to new year

Although the U.S. Senate reconvened on Thursday, there was little hope for an end to the partial government shutdown which entered a seventh day.

U.S. President Donald Trump grappled with Congress over $5 billion in funding for the border wall with Mexico and attention turned to Jan. 3 when Democrats take control of the House of Representatives.

Democratic chief Nancy Pelosi, incoming House speaker, has promised that the chamber will pass a spending bill designed to reopen the government without funding for the border wall.

“We will vote swiftly to reopen government and show that Democrats will govern responsibly in stark contrast to this chaotic White House,” Pelosi said in a statement.

4. Oil prices bounce back ahead of U.S. inventory data

Oil prices bounced back from after a 3.5% decline in the prior session, but still remained close to 18-month lows as concerns over global supply pummeled prices despite an agreement between OPEC and allies led by Russia to cut output beginning in January.

U.S. crude oil futures gained $1.00, or 2.24%, to $45.61 by 5:56AM ET (10:56 GMT), while Brent oil traded up 90 cents, or 1.71%, to $53.63.

Investors turned their attention to data out later in the session. the government's Energy Information Administration (EIA) will release its weekly report on crude inventories at 11:00 AM ET (16:00 GMT), amid expectations for a stock draw of 2.9 million barrels. If confirmed, that would mark the fourth consecutive decline. U.S. crude inventories for the week to Dec. 21 rose by 6.9 million barrels to 448.2 million barrels on increased refinery output, according to data released on Thursday by industry group the American Petroleum Institute.

Also on the radar, Baker Hughes will release its weekly rig count data, an early indicator of future output, at 1:00 PM ET (18:00 GMT).

5. Trickle of data on tap in holiday-thinned trade

Due to the partial government shutdown, trade balance data and wholesale inventories that were originally scheduled for release Friday will not be published.

However, the Chicago purchasing managers’ index for December is expected to be released at 9:45 AM ET (14:45 GMT), while the National Association of Realtors will publish November pending home sales at 10:00 AM ET (15:00 GMT).

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