Here are the top five things you need to know in financial markets on Friday, August 19:
1. Oil pulls back from 2-month high on profit taking
Market participants took profits in crude in early trade on Friday after oil prices rallied for six straight days to hit two-month highs.
Both U.S. crude and London’s Brent had entered a bull-market, gaining more than 20% since August lows on hopes that OPEC members would take measures to support oil prices when they meet on the sidelines of the International Energy Forum next month.
Meanwhile, investors looked ahead to fresh information on U.S. drilling activity.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by 15 to 396, the seventh consecutive weekly rise and its longest stretch of increases since April 2014.
U.S. crude oil futures slipped 0.04% to $48.20 at 9:56AM GMT, or 5:56AM ET, while Brent oil traded down 0.31% to $50.73.
2. Markets eye Fed commentary for clues on policy shift
After minutes from the Federal Reserve’s (Fed) last policy meeting showed members divided over the future path of monetary policy, market players have continued to chew over remarks from various Fed officials throughout the week.
After the close on Thursday, San Francisco Fed president John Williams argued for a rate hike “sooner than later” and insisted that September was definitely “in play”.
Dallas Fed president Robert Kaplan later commented that policy normalization was hampered by a low neutral rate.
Odds for a rate hike in September were only 12% on Friday with the probability only hitting the 50% threshold for the February 2017 meeting, according to Investing.com’s Fed Rate Monitor Tool.
3. Dollar wallows near 7-week lows
Though the dollar edged up off seven-week lows on Friday, it was still on track for weekly losses of more than 1% as the dovish read of the Fed meeting minutes pummeled the green back this week.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, hit a low of 94.05 on Thursday, its weakest level since June 23. It was last up 0.36%, at 94.45, by 9:57AM GMT, or 5:57AM ET.
4. Global stocks mixed in cautious trade without data
Asian stocks managed to end Friday’s session higher, following the meager gains recorded on Wall Street.
European stocks were mostly lower on Friday as uncertainty over the timing of future U.S. rate hikes weighed and profit-taking in crude put a damper on energy stocks.
Meanwhile, U.S. futures traded lower undoing Thursday’s gains as range-bound summer trade continued to dominate the markets. At 9:52AM GMT, or 5:52AM ET, the blue-chip Dow futures fell 47 points, or 0.25%, S&P 500 futures lost 6 points, or 0.29%, while the Nasdaq 100 futures traded down 15 points, or 0.30%.
5. Applied Materials soars 5% amid trickle of earnings
Though Wal-Mart (NYSE:WMT) marked the unofficial close of the April-June earnings season on Thursday, some stragglers continued to report their numbers.
Such was the case of Applied Materials Inc (NASDAQ:AMAT) after the close on Thursday. Shares in the semiconductor chip maker soared more than 5% in pre-market trade on Friday after beating estimates and publishing record highs in new orders.
On the downside, Gap Inc (NYSE:GPS) was down nearly 2% in Thursday’s after-hours trade. The clothing retailer produced a profit-forecast that missed consensus.
Among earnings to watch on Friday, traders would digest reports from Foot Locker Inc (NYSE:FL), Estee Lauder Companies Inc (NYSE:EL) or Deere & Company (NYSE:DE) before the opening bell.