Investing.com — Retail sales and Michigan consumer sentiment data round off a busy week for economic news that has been dominated by the inflation debate. Intel (NASDAQ:INTC) is in talks for what would be its biggest ever acquisition. Moderna (NASDAQ:MRNA) stock soars after being included in the S&P 500, China launches its long-awaited carbon emissions market, and oil steadies after falling on reports of a breakthrough on OPEC output policy. Here’s what you need to know in financial markets on Friday, July 16th.
1. Retail sales, Michigan consumer sentiment due
Two more big data releases round off a week that has been dominated by the debate over the highest U.S. inflation in decades.
Retail sales data for June will be released at 8:30 AM ET (1230 GMT), and are expected to show a second straight drop, albeit of only 0.4% after 1.3% in May. That mostly reflects the shift of consumer spending back to services as the economy reopens.
Perhaps of more importance will be the inflation expectations component of the University of Michigan’s consumer sentiment index, which will be published at 10 AM ET. One of the key arguments underpinning the Federal Reserve’s relaxed attitude toward the spike in prices has been the understanding that medium-term inflation expectations are still well anchored. Chairman Jerome Powell told Congress this week that the Fed would react if that changed.
Elsewhere overnight, the Bank of Japan became the third Asian central bank this week to cut its growth forecast for this year, due largely to pandemic effects.
2. Intel reportedly in talks to buy GlobalFoundries
Intel is reportedly in talks for what would be its biggest ever acquisition as it seeks to reinvent itself as a maker of silicon chips for other companies.
The Wall Street Journal said that the company has spoken to Mubadala Investment Corp, the owner of GlobalFoundries, to buy it for around $30 billion. It added that the shape of any deal is far from certain, and could also include an IPO of GlobalFoundries, the specialist chipmaking unit spun of by Advanced Micro Devices (NASDAQ:AMD) 13 years ago.
Under new CEO Pat Gelsinger, Intel has pledged $20 billion to expand its chipmaking facilities in the U.S., against a backdrop of surging demand for connected devices that has only been amplified, in the short term at least, by the pandemic. Intel stock was up 1.0% in premarket.
3. Stocks set to bounce; Moderna gets index boost
U.S. stock markets are set to open moderately higher later, on course for a fourth straight weekly gain, with Intel’s news helping to restore sentiment toward chipmakers after Thursday’s losses.
By 6:15 AM ET, NASDAQ Futures were up 0.2%, while Dow Jones futures were up 48 points, or 0.1% and S&P 500 futures were also up a little more than 0.1%.
The earnings roster’s highlights are Charles Schwab (NYSE:SCHW) and State Street (NYSE:STT), while railroad operator Kansas City Southern (NYSE:KSU) is under pressure to impress after the Biden administration’s recent executive order threatened to nix the current bidding war for it.
Moderna stock will also be in focus after news of its admission to the S&P 500 after the close on Thursday. Membership Collective (NYSE:MCG) stock will be looking for a bounce after the private club operator fell nearly 10% on its debut Thursday.
4. China launches carbon market
China launched what is set to be the world’s largest market for carbon dioxide emissions, in one of the most important moves yet to put a price on the poor environmental performance of its energy and industrial sectors.
The move comes as Europe and, increasingly, the U.S. embrace the idea of using ‘carbon border taxes’ to neutralize the economic advantage that China’s manufacturers have gained from its lax environmental standards and its heavy reliance on coal-fired power.
The EU’s new climate agenda, published earlier this week, raised the importance of the so-called Carbon Border Adjustment Mechanism. Democratic Senators were reported by the New York Times and Financial Times on Thursday to be drawing up plans for an analogous U.S. scheme.
5. Oil steadies after OPEC peace deal reports; rig data, CFTC reports due
Crude oil prices recovered overnight somewhat but remain on course for a second straight weekly drop amid reports of an imminent settlement of the dispute over market share between Saudi Arabia and the United Arab Emirates.
An agreement would pave the way for the so-called OPEC+ bloc to go ahead with its plan to raise output by 400,000 barrels a day every month until the end of the year. The International Energy Agency had warned earlier in the week of a significant tightening of global markets if this plan didn’t go ahead.
By 6:20 AM ET, U.S. crude futures were up 0.4% at $71.94 a barrel, while Brent crude futures were up 0.3% at $73.69. Baker Hughes drilling rig data and the Commodity Futures Trading Commission’s weekly data on the commitments of traders round off the week later.
Source: Economy - investing.com
