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. 21:

1. Threat of U.S. government shutdown in focus

Although the U.S. House of Representatives passed a temporary funding measure on Thursday that included funding for the proposed southern border wall, odds were low that the Senate would give its approval, causing fears that an agreement would not be reached to avoid a government shutdown ahead of Friday’s midnight deadline.

The House passed a bill to keep the government running until Feb. 8, but the Senate, which convenes at 12:00 PM ET (17:00 GMT), would likely shoot down the proposal precisely because of the more than $5 billion in funding for the wall.

The Senate had approved a bill to keep the government running, but U.S. President Donald Trump refused to sign it because it lacked the funding for border security.

“Any measure that funds the government must include border security,” Trump insisted.

If temporary funding is not approved, nine government departments including Homeland Security will close ahead of the Christmas holiday, according to Bloomberg.

2. Global stocks drop on growth fears, imminent U.S. government shutdown

Global stocks continued a sharp selloff on Friday as global growth concerns and the pending closure of the U.S. government continued to weigh on risk appetite.

U.S. futures pointed to a lower open on Friday with market nerves on edge over the possibility that the government will shut down at midnight. Trading was expected to be thin as many traders have already packed their bags ahead of the Christmas holiday. At 6:02 AM ET (11:02 GMT), the blue-chip Dow futures fell 96 points, or 0.42%, S&P 500 futures lost 11 points, or 0.44%, while the Nasdaq 100 futures traded down 32 points, or 0.51%.

Elsewhere, European stocks traded lower as concern over the pending U.S. government closure and the recent policy tightening stateside convinced investors to remove risk from their portfolios.

Earlier, Asian stocks shared in the risk-off sentiment. Japan's Nikkei 225 lost 1.1% to close at its lowest since mid-September last year, after giving up 5.6% this week, while China’s Shanghai Composite ended 0.8% lower.

3. U.S. data deluge to keep investors on their toes

Although many traders are packing up for the holidays, there’s a wave of economic data coming out ahead of the break.

The Commerce Department will report on durable goods orders for November at 8:30 AM ET (13:30 GMT).

On average, economists expect that orders for long-lasting goods rose 1.6% last month and that core durable goods orders, which exclude autos, rose 0.3%.

The final measure of third-quarter GDP will also be released at that time, with forecasts for it to stay at its previous estimate of growth at an annual rate of 3.5%.

At 10:00 AM ET (15:00 GMT), the November figures on personal spending and income will be published, with both expected to have risen 0.3%. The core PCE price index, the Fed’s favorite inflation gauge, is forecast to tick up to an annual rate of 1.9%, just below the Fed’s target.

Also coming in at that time will be the final measure of the University of Michigan’s consumer sentiment index for December. Economists expect it rose slightly from its preliminary measure to 97.6.

4. Nike jumps 8% as results beat consensus

Bullish signs are few and far between, but Nike’s strong earnings after Thursday’s close could provide the market some buying optimism.

Nike reported a fiscal second-quarter profit of 52 cents per share on sales of $9.4 billion. That topped estimates for earnings of 46 cents a share and sales of $9.17 billion.

Gross margin came in at 43.8%, beating guidance of 43.5%.

Shares in Nike (NYSE:NKE) jumped almost 8% in premarket trade on Friday.

5. Oil heads for weekly decline of 10%

Overnight gains evaporated in early morning trade on Friday as oil prices extended a sharp weekly decline.

U.S. crude oil futures lost 35 cents, or 0.76%, to $45.53 by 6:03 AM ET (11:03 GMT), while Brent oil traded down 70 cents, or 1.29%, to $53.65.

Crude had received a boost from news that OPEC was planning to release the individual quotas for its production cut, showing Saudi Arabia would reduce more than expected.

But buying interest faded in early morning trade, falling further from their peak in October as concerns over oil demand increased because of a slowing global economy and signs of oversupply.

Worries of a global supply glut will remain in the spotlight on Friday as investors keep an eye on a measure of future U.S. output with Baker Hughes’ weekly data out at 1:00 PM (18:00 GMT).

Bulls hope that the number of active domestic rigs drilling for oil will register its third straight decline, after falling last week by four to 873, the lowest since mid-October.

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