Investing.com - Here are the top five things you need to know in financial markets on Friday, May 25:
1. Fed chair Powell in the spotlight
An appearance by Federal Reserve chairman Jerome Powell Friday will likely garner special attention following the release of dovish Fed minutes on Wednesday. The Federal Reserve’s minutes showed policymakers were content with inflation temporarily overshooting the 2% target, pushing odds for a fourth rate hike this year back below the 50% threshold.
Powell will participate in a panel discussion of "Financial Stability and Central Bank Transparency" sponsored by the Sveriges Riskbank scheduled from 9:15AM ET (13:15GMT) to 10:30AM ET (14:30GMT) in Stockholm, Sweden.
While markets have fully priced in a second hike at the June 12-13 meeting, traders have been considering whether the U.S. central bank may become slightly more aggressive in policy tightening, given recent signs of a pickup in inflation.
The June policy decision will be accompanied by updated economic projections and investors will keep a close eye on the “dot plot” which shows policymakers’ forecasts for interest rates.
Separately, Atlanta Fed president Raphael Bostic, Chicago Fed chief Charles Evans and Dallas Fed president Robert Kaplan will participate in a panel discussion at the Federal Reserve Bank of Dallas conference entitled "Technology-Enabled Disruption: Implications for Business, Labor Markets and Monetary Policy" in Dallas at 11:45AM ET (15:45GMT).
2. Dollar steady ahead of Powell, durable goods
The dollar showed little movement in early morning trade on Friday, on track for slight weekly gains of around 0.3%, as investors looked forward to any clues on monetary policy from Fed chair Jerome Powell and waited for the day’s economic data.
The Commerce Department will release its preliminary report on April durable goods orders at 8:30AM ET (12:30GMT) with forecasts pointing to a 1.4% decline. The more closely watched core reading is expected to show a 0.5% increase.
The University of Michigan will also provide an updated reading of consumer sentiment in May. Markets are currently expecting no revision to the preliminary reading of 98.8.
At 5:52AM ET (9:52GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged forward 0.11% at 93.82.
3. Output concerns continue to slam oil ahead of U.S. shale output data
Oil slid on Friday amid growing concerns that the Organization of Petroleum Exporting Countries could increase output as soon as June and while market participants waited the most recent reading on U.S. shale production.
Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil output by around 1 million barrels per day (bpd), easing 17 months of strict supply curbs amid concerns that a price rally has gone too far, sources familiar with the matter told Reuters on Friday.
OPEC and non-OPEC producers led by Russia have been cutting crude output by 1.8 million barrels per day (bpd) to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018. The organization is set to meet in Vienna on June 22.
U.S. crude oil futures slid 1.91% to $69.36 at 5:57AM ET (9:57GMT), while Brent oil slumped 2.04% to $77.18.
Meanwhile, market participants looked ahead to the weekly instalment of drilling activity from Baker Hughes on Friday that will provide investors with fresh insight into U.S. oil production and demand.
Data last week showed the number of U.S. oil rigs steadied after rising for five weeks in a row.
4. Foot Locker quarterly results on tap
Foot Locker (NYSE:FL) is slated to release first-quarter earnings before U.S. markets open on Friday amid expectations that a stronger domestic performance from Nike (NYSE:NKE) bolstered the sports retailer’s same-store sales.
Foot Locker is expected to report earnings of $1.25 per share on $1.96 billion revenue.
While waiting for Foot Locker’s results, several firms were expected to see big moves after releasing their own earnings after the market close a day earlier.
Gap (NYSE:GPS) saw shares tumble nearly 8% in extended hours after the retailer reported worse-than-expected earnings per share, Ross Stores (NASDAQ:ROST) sank 5% after the department store chain disappointed with its second quarter same-store sales forecast and Autodesk (NASDAQ:ADSK) slid more than 5% as the software company also provided a weak outlook.
On the upside, Deckers Outdoor (NYSE:DECK) jumped more than 4% as the apparel retailer smashed consensus expectations on the top and bottom line.
5. Global shares find solace in North Korean response to Trump
Global stocks were trading mostly higher on Friday as markets appeared to take relief in the conciliatory response provided by North Korea after U.S. President Donald Trump cancelled a June 12 summit.
North Korean vice foreign minister Kim Kye Gwan said Pyongyang still hoped for a "Trump formula" to resolve the standoff over its nuclear weapons program, noting that the country was open to resolving issues with the United States.
European stocks traded mostly higher nearing midday trade on Friday, while Asian shares closed mixed, but off intraday lows thanks to the North Korean announcement.
U.S. futures pointed to a higher open Friday ahead of Powell and the economic data, although trading was expected to be light ahead of the long holiday weekend. Wall Street will remain closed on Monday for Memorial Day. At 5:58AM ET (9:58GMT), the blue-chip Dow futures gained 61 points, or 0.25%, S&P 500 futures rose 6 points, or 0.22%, while the Nasdaq 100 futures traded up 28 points, or 0.40%.