Here are the top news, trends, and analysis investors need to start their trading day:
1. Stock futures after the first week of second quarter profits flat
Michael Nagel | Bloomberg | Getty Images
US stock futures were flat on Friday morning, the final day of trading in the first week of earnings reports for the second quarter. Dow futures implied an opening gain of around 35 points, while the futures for the S&P 500 and the Nasdaq hardly changed. A day earlier, the Dow Jones Industrial Average rose 53.79 points, or 0.15%, to close at 34,987.02. The broad S&P 500 and tech-heavy Nasdaq lost 0.33% and 0.7%, respectively. The 30-strong Dow is on track for its fourth consecutive positive week. However, the Nasdaq is well on its way to ending an eight-week winning streak, and the S&P 500 is well on its way to breaking its three-week winning streak.
Wall Street will take a look at recent American spending habits at 8:30 a.m. ET when the Department of Commerce releases June retail sales. According to the Dow Jones, economists expect a decline of 0.4%. Retail sales fell more sharply than Street forecast in May.
This week’s earnings reports were highlighted by the major US banks. Looking ahead to the beginning of next week, IBM is due to report on Monday, while Netflix, United Airlines and Chipotle Mexican Grill will publish the results on Tuesday.
2. Yellen expects further “rapid inflation” before the slowdown sets in
Treasury Secretary Janet Yellen speaks during a daily press conference in the James Brady Press Briefing Room of the White House May 7 in Washington, DC.
Alex Wong | Getty Images
Treasury Secretary Janet Yellen told CNBC she expected “inflation to accelerate for several months” before price pressures abate. “I’m not saying this is a one-month phenomenon. But I think in the medium term inflation will return to normal levels. But of course we have to keep a close eye on it,” Yellen told CNBC’s Sara Eisen in an interview that came after the Closing Bell aired on Thursday.
The latest consumer and producer price indices, released earlier this week, surpassed Wall Street’s expectations and showed that inflation persisted during the US economy’s pandemic rebound in June.
In the hot real estate market, this is a “completely different phenomenon” from the real estate bubble that burst around the 2008 financial crisis. However, she said, “I am concerned about affordability and the pressures that higher house prices are putting on families who are first buying a home or have lower incomes.”
3. Biden says the US will warn companies that the Hong Kong situation is “getting worse”
U.S. President Joe Biden stops at the Green Road Community Center in Raleigh, North Carolina, the United States, on Jan.
Jonathan Ernst | Reuters
The US plans to warn American companies about “what can happen” in Hong Kong as the Chinese government continues to exert influence over the semi-autonomous region, President Joe Biden said Thursday. Biden said the situation in Asia’s financial center was “worsening” and criticized Beijing for “failing to honor its commitment” to the former British colony, which returned to Chinese rule in 1997. Reuters reported that the Biden government has launched a round of sanctions against Chinese government officials for their role in cracking down on democracy in Hong Kong.
The planned measures by the Biden administration reflect the ongoing tensions in US-China relations, which were frosty even under then-President Donald Trump.
4. Intel in talks to acquire GlobalFoundries for approximately $ 30 billion, WSJ reports
The Intel logo is displayed outside of the Intel headquarters in Santa Clara, California.
Justin Sullivan | Getty Images
Intel’s shares rose about 0.6% in early trading on Friday after the Wall Street Journal reported the semiconductor company was in talks to acquire GlobalFoundries for about $ 30 billion. But the newspaper, citing people familiar with the matter, reported that Intel’s potential deal for the US chipmaker may not materialize. GlobalFoundries, owned by Mubadala Investment Company, a UAE sovereign wealth fund, had reportedly been looking into a blockbuster IPO.
Under the leadership of the new CEO Pat Gelsinger, Intel plans to invest billions in the construction of two chip factories in Arizona and put a new foundry unit into operation. As an influential company in Silicon Valley history, Intel has lagged behind Asian competitors such as Taiwan Semiconductor Manufacturing Company in recent years.
5. LA County reinstates the mandate for inner masks
A son hugs his mother as a concession worker hands out napkins and lemonade at the AMC Theater in the Westfield Century City Shopping Center in Los Angeles, California on Monday, March 15, 2021.
Bing Guan | Bloomberg | Getty Images
Los Angeles County, the largest county in the country, is demanding that people return to wearing face masks indoors as the number of coronavirus cases, fueled by the highly transmissible Delta variant, increases. The mandate, which also applies to people vaccinated against Covid, comes into force on Saturday before midnight.
LA County dropped its mask requirement for fully vaccinated individuals about a month ago, coinciding with the state of California lifting most of the pandemic-era restrictions. The district health officer, Dr. Muntu Davis said Thursday the area is now seeing “significant community transmission”. The majority of cases are recorded in people who have not received the Covid vaccine.
Overall coronavirus cases in the United States have increased recently as public health officials around the world are concerned about the Delta variant.
– The Associated Press contributed to this report. Follow all market activity like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.