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Nike, PCE, European Travel, OPEC - What's Moving Markets

Published 06/25/2021, 05:29 AM
Updated 06/25/2021, 05:31 AM
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By Peter Nurse

Investing.com --Nike (NYSE:NKE) will be in the spotlight after predicting strong growth, the European travel season is in doubt, important U.S. inflation numbers are due, while crude remains near multi-year highs. Here's what's moving markets on Friday, June 25th.

1. Nike set to pass $50 billion annual revenue

Nike will be in the spotlight Friday, after the sportswear giant reported a blowout quarter and a strong outlook after the close Thursday, with customers seemingly keen to get back outside and exercising as the Covid-19 pandemic draws to an end.

At 5:30 AM ET (0930 GMT), Nike stock traded up over 11% in premarket, after dropping over 5% so far this year. 

The retailer posted better-than-expected quarterly earnings and revenue, but it was its forecast of fiscal 2022 revenue surpassing $50 billion for the first time that really hit the mark.

Sales in China, hit by a backlash after the company tried to distance itself from allegations of using slave labor in Xinjiang province, were the only disappointment . Nike CEO John Donahoe mounted a strong defense of the company’s position in the country, saying, "Nike is a brand that is of China and for China."

Nike’s European rivals also posted stock gains Friday. Adidas (OTC:ADDYY) stock rose nearly 5% and Puma (DE:PUMG) stock gained almost 2% to a new post-pandemic high.. 

2. Stocks seen higher; Infrastructure deal helps tone

U.S. stocks are seen opening marginally higher Friday, extending Thursday's gains, helped by the news of progress on a new infrastructure deal to boost the economy.

By 5:30 AM ET, Dow Jones futures were up 90 points, or 0.3%, S&P 500 futures were 0.1% higher and Nasdaq 100 futures climbed 0.1%.

The main equity indices surged Wednesday, with the blue-chip Dow Jones Industrial Average climbing over 300 points, or nearly 1%, while the broad-based S&P 500 rose 0.6%, to a record high, and the tech-heavy Nasdaq Composite rose 0.7%, also another record high.

President Joe Biden announced on Thursday a near $600 billion deal on infrastructure, paving the way for fresh investment in roads, bridges and broadband internet. The deal was backed by a centrist, bipartisan group of some 10 Senators.

In corporate news, aside from Nike, the banking sector is likely to be in focus after the Fed’s stress tests left them largely free to resume buybacks and dividends.

3. Key inflation data due

A busy week for Fedspeak comes to a close with both Cleveland President Loretta Mester and Boston President Eric Rosengren slated to take part in events. 

They'll be speaking after the release of the Fed’s preferred gauge of inflation, the core personal consumption expenditures price index, at 8:30 AM ET (1230 GMT). This is expected to show year-on-year gains of 3.4% in May, climbing from 3.1% in April, and way above the Fed’s nominal target of 2%.

Also due for release is the Michigan consumer sentiment index, 90 minutes later, which is expected to climb to 86.4 in June from 82.9 in May, as economic reopenings and a return to near normalcy boost sentiment. This release also includes an inflation component, and investors will be looking to see if the Fed's barrage of palliatives this week have had any effect on Joe Public.

4. European travel curbs

The debate over European travel for the important summer holiday season rumbles on.

An EU summit failed to agree a common line on quarantine requirements for travelers from the U.K., resisting pressure from German Chancellor Angela Merkel, who warned earlier in the week that Europe is “on thin ice” in its battle against the coronavirus, in view of how the highly contagious Delta variant is spreading on the continent.

The U.K. itself added a few more destinations to its 'green list' , which now includes Spain's Balearic islands, Malta, and a number of Caribbean islands. All the same, airline and most other travel stocks still drifted lower.

Prime Minister Boris Johnson also hinted at a further relaxation of traveling rules for Britons who have received both doses of a coronavirus vaccine. 

 5. Crude higher; OPEC+ meeting looms large

Crude oil prices edged lower Friday, but are still heading for a fifth consecutive positive week ahead of next week’s meeting of top producers to determine future output levels. 

By 5:30 AM ET, U.S. crude was down 0.3% at $73.05 a barrel, while Brent was down 0.3% at $75.33, with both contracts up 2% so far this week and around 50% higher year-to-date.

The Organization of Petroleum Exporting Countries and its allies, a group known as OPEC, will meet on July 1, under pressure to increase supply, given how far prices have rallied.

Ahead of that, traders will focus on the latest weekly update from Baker Hughes of the number of U.S. oil rigs,  with rising prices making it more economic for shale producers to return and take market share.

Additionally, the CFTC will release its weekly commitments of traders report, a guide on how the market is positioned.

 

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