Dec 22, 2023: U.S. futures saw a slight decline Friday, influenced by Nike’s subdued outlook and anticipation surrounding key inflation figures.
At 06:00 ET (11:00 GMT), Dow Futures slipped by 100 points, or 0.3%, while S&P 500 Futures showed a 0.1% decrease, and Nasdaq 100 Futures dropped 20 points or 0.1%.
On Thursday, Wall Street bounced back, with the Dow Jones Industrial Average surging over 300 points (0.9%), S&P 500 climbing 1%, and Nasdaq Composite rising 1.3%. These indices are headed for their eighth straight positive week, marking a historical run for S&P 500 since 2017 and for DJIA since 2019.
Concerns Ahead of PCE Inflation Report Investors might take a cautious stance as they await the release of the personal consumption expenditures (PCE) report, a crucial inflation metric by the Fed for November.
Forecasts suggest a flat PCE price index for November, while the core measure (excluding volatile food and energy costs) is expected to rise by 0.2%.
The recent gains have been largely driven by a more dovish Federal Reserve, with markets factoring in around 150 basis points of interest rate cuts in the upcoming year. Any signs of persistent inflation could dampen these expectations, yet the downward revision of PCE in third-quarter growth data hints at a possible downside surprise.
Nike’s Revenue Forecast Weighs on Sentiment Nike’s decision to revise down its yearly sales forecast, citing restrained consumer spending, is impacting market sentiment.
Pre-market, Nike (NYSE:NKE) shares fell more than 11% after it adjusted its full fiscal-year revenue growth projection to approximately 1%, a significant drop from its earlier mid-single-digit percentage forecast.
“We are observing signs of more careful consumer behavior globally,” mentioned Matthew Friend, Nike’s chief financial officer, during the earnings call.
In other news, Tesla (NASDAQ:TSLA) is expected to recall over 120,000 Model S and Model X vehicles in the U.S. due to the risk of cabin door unlocking during a crash, according to the country’s road safety regulator.
Occidental Petroleum (NYSE:OXY) saw a premarket rise following a regulatory filing indicating Berkshire Hathaway’s acquisition of 5.2 million shares, increasing its stake close to 28%.
Oil Prices Surge Despite Angola Exiting OPEC Oil prices climbed Friday, aiming for substantial weekly gains, fueled by concerns over shipping disruptions in the Red Sea following Houthi-led attacks on vessels in the region.
U.S. crude futures traded 0.9% higher at $74.58 a barrel, while the Brent contract rose 0.7% to $79.97 per barrel by 06:00 ET.
The benchmark contracts are both up by over 4% this week, amid expectations of supply disruptions, especially in the crucial Asian market, as several oil and shipping companies opt to avoid the Suez Canal, which handles approximately 12% of global trade.
Angola’s decision to exit the Organization of Petroleum Exporting Countries (OPEC) has capped some gains. Although Angola’s output within OPEC is minor, Brazil’s anticipated entry next year raises concerns about the organization’s unity.
Additionally, gold futures increased by 0.8% to $2,067.55/oz, while EUR/USD traded 0.1% higher at 1.1018.
