A look at the day ahead in U.S. and global markets by Harry Robertson
From U.S. small-cap stocks to bitcoin to the dollar, some investors are seeking out assets that can prosper under a second Donald Trump presidency.
The former president has taken the lead over Vice President Kamala Harris in betting markets, although Harris held a marginal lead in a Reuters/Ipsos poll this week.
So-called Trump trades focus on those parts of the global economy likely to feel the force of tariff hikes, deregulation, and bigger deficits.
The Mexican peso, for example, is down 4% from its September high as investors fret about tariffs. Shares in Trump Media & Technology Group are up more than 140% since Sept. 23.
Some analysts see the Trump effect in the recent rise in bond yields and the dollar. The difficulty is separating politics from economics.
Data on Thursday showed U.S. retail sales increased 0.4% in September, more than anticipated, while weekly jobless claims fell unexpectedly.
Treasury yields rose as investors slightly moderated their bets on further Federal Reserve rate cuts, boosting the dollar.
The figures bolstered hopes of a "soft landing" for the U.S. economy, helping the Dow Jones index hit a record high and keeping the S&P 500 near a record too.
S&P 500 futures were higher on Friday, while European stocks climbed - tech companies in particular.
Netflix (NASDAQ:NFLX) added to a broadly upbeat start to the third-quarter earnings season on Thursday, topping subscriber targets.
Oil prices held steady on Friday even after Hezbollah said it would escalate its conflict with Israel following the killing of Hamas leader Yahya Sinwar.
CHINESE GROWTH SLOWS
While the U.S. economy hums, China's sputters, at least by its standards.
Data on Friday showed China's economy grew at the slowest pace since early 2023 in the third quarter. It expanded 4.6% in July-September, above a 4.5% forecast in a Reuters poll but below the 4.7% pace in the second quarter.
Industrial output and retail sales rose and beat expectations, but the property sector remained mired in a downturn.
Chinese stocks jumped 3.6%, however, as investors were focused on the start of two of Beijing's stimulus measures that will initially pump as much as 800 billion yuan ($112.38 billion) into the equity market.
Europe has been feeling the effects of China's slowdown, with weakness in Germany one of the factors pushing the European Central Bank to cut interest rates by 25 basis points to 3.25% on Thursday.
The gap between U.S. and euro zone benchmark German bond yields jumped to its highest since late June as investors moved to price in more ECB cuts.
Key developments that should provide more direction to U.S. markets later on Friday:
* U.S. earnings include American Express (NYSE:AXP) and Procter & Gamble (NYSE:PG)
* U.S. housing starts and building permits data
* Fed officials Raphael Bostic and Christopher Waller are due to speak, while Neel Kashkari moderates a panel