5 Keys on Wall Street By Investing.com

Investing.com – U.S. stock futures rose on Friday, with investors awaiting the release of PCE data, the Federal Reserve’s preferred measure of inflation. The personal consumption expenditures price index is expected to show price growth cooled in May, potentially strengthening the case for the Fed to cut interest rates sharply in 2024.

On the other hand, the actions of Nike (NYSE:) fell after the sportswear group warned that sales will decline this quarter, while U.S. President Joe Biden falters in the debate with Donald Trump.

Here we have the five main issues to keep an eye on this Friday, June 28, in the financial markets.

1. Futures point to the upside

U.S. stock futures are set to open higher on Friday as investors await the release of the Federal Reserve’s preferred inflation gauge, which could influence how the central bank approaches possible interest rate cuts later this year.

At 9:34 a.m. (CET), the contract was up 19 points or 0.1%, the price was up 15 points or 0.3% and the price was up 75 points or 0.4%.

Wall Street’s major indexes closed in positive territory on Thursday, but gains were relatively muted as markets awaited the release of the personal consumption expenditures (PCE) price index for May (see below). The benchmark index rose 0.1%, the tech index gained 0.3% and the U.S. index advanced 0.1%.

2. PCE

Friday’s PCE data is expected to show U.S. inflation slowed in May from the previous month, which could give the Fed further impetus for a possible rate cut in 2024.

The overall PCE is expected to slow to 0.3% on a monthly basis, down from a 0.3% increase in April. Economists expect the figure to cool to 2.6% on an annual basis from 2.7% in May.

The so-called “core” PCE, which excludes volatile items such as food and fuel, would fall to 0.1% month-on-month and 2.6% year-on-year.

“In our opinion, both readings would be acceptable for the Federal Reserve’s rate cut narrative to continue consolidating,” analysts at ING (AS:) point out in a note to clients.

3. Nike shares fall after the group’s sales decline

Nike shares fell more than 12% of their value after the sportswear company told investors that revenue is expected to decline 10% this quarter.

Sales for this fiscal year are also expected to decline by a single-digit percentage.

In a post-earnings conference call, Chief Financial Officer Matthew Friend said the guidance reflects “more aggressive actions” in the management of its classic footwear products, “continued challenges” in its digital business and a “weak” wholesale order book. The outlook for its key operations in China, which account for more than 14% of its global sales, has also been “weakened,” Friend said.

“This quarter we have had to deal with several adverse factors, which we expect to have a more pronounced impact in the fiscal year.” [20]25,” says Friend. “Although the next few quarters will be difficult, we are confident that we are repositioning Nike to be more competitive with a more balanced portfolio to drive long-term sustainable and profitable growth.”

Fourth-quarter net income fell 17% to $12.61 billion, missing Wall Street expectations of $12.84 billion, according to LSEG data cited by Reuters. In particular, sales of Nike’s Converse sneakers fell 18%. However, earnings per share of $0.99 beat estimates.

4. Biden falters in a heated debate with Trump

Democratic President Joe Biden appeared to struggle during much of Thursday’s highly anticipated 90-minute debate with Republican challenger Donald Trump, stumbling over questions posed to him by the event’s moderators.

The debate televised by CNN was presented as a confrontation between two candidates who face great difficulties both due to their age – Biden is 81 years old and Trump 78 – and their temperament.

Biden’s performance was marked by a hoarse voice and a series of long pauses, which largely overshadowed his attacks on Trump’s recent criminal conviction and his inability to accept democratic norms. Trump, for his part, attacked Biden’s record on the economy and foreign policy.

Following the event, media outlets suggested that Democrats were increasingly concerned about Biden’s ability to run a successful campaign ahead of November’s presidential election.

5. Oil on track for big weekly gains

Crude oil prices rose on Friday, heading for a third straight week of gains, as fears over supply disruptions in Russia and the Middle East largely offset concerns about slowing demand.

At 9:31 a.m. (CET), futures are up 0.8% to $82.36 per barrel, while the contract is up 0.7% to $85.84 per barrel. Brent and WTI futures have gained nearly 2% so far this week, and both oil benchmarks are on track to post gains of around 6% in June.

Fears of a widespread war between Israel and Hezbollah in Lebanon keep markets on edge over crude supply disruptions, while Ukraine’s attacks on major Russian fuel refineries also point to possible oil supply disruptions from Moscow.

Geopolitical conflicts have caused traders to place a higher premium on oil prices. This offsets rising US crude stockpiles, which is fueling concerns about cooling US fuel demand as the world’s biggest oil consumer faces persistent inflation and high interest rates.

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