Five things you need to know before the market opens on Friday November 25:
1. — Stock Futures Edge Higher, Dollar Extends Retreat
US equity futures bumped higher Friday, while the dollar extended its retreat in foreign exchange markets heading into the holiday-shortened session amid bets on smaller near-term rate hikes from the Federal Reserve.
Minutes from the Fed’s early November policy meeting, released late Wednesday showed a clear bias for smaller increases in the Fed Funds rate going forward as officials looked to both monitor their impact on the broader economy and avoid dislocation in financial markets.
The tone of the minutes, alongside data suggesting inflation in the world’s largest economy has likely peaked, has clipped bets on a 75 basis point rate hike next month in Washington to just under 25%, while taking the US dollar index to a three-month low of 105.878 in overnight trading.
Benchmark Treasury bond yields are also in retreat, with 2-year note yields falling to 4.469% and 10-year notes trading as low as 3.65% in the overnight session.
China’s Covid crisis kept a lid on sentiment, however, with daily infections rising to more than 31,000 yesterday, the highest since April 13, triggering new lockdown orders in major cities around the country.
Crude oil prices bounced higher in overnight trading, but are still on pace for their fourth weekly decline, after the collapse of an EU plan to cap the price of Russian crude exports at between $65 and $70 per barrel.
WTI futures for January delivery were $1.43 higher at $79.51 per barrel while Brent contracts for the same month added $1.18 to $86.52 per barrel.
Heading into the start of the trading day on Wall Street, which ends at 1:00 pm Eastern time, futures contracts tied to the S&P 500 are priced for a 4 point opening bell gain while those linked to the Dow Jones Industrial Average are indicating a 50 point bump. The tech-heavy Nasdaq is expected to open little-changed from Wednesday’s close.
2. — Apple Slips Amid Reports of More Disruption At iPhone Factory In China
Apple AAPL shares edged lower in pre-market trading following a report that suggested disruptions at its key iPhone facility in China could reduce November supplies by as much as 30%
Reuters reported Friday that officials at the Foxconn factory in Zhengzhou, which has been occupied by both strict Covid restrictions and a series of employee protests over pay and working conditions, likely won’t be able to return the iPhone factory to full capacity until at least next month, with November output falling at ‘at least’ 30% as a result.
Earlier this month, Apple cautioned that Covid restrictions at the 200,000-person plant would curtail shipments of its higher-end iPhones heading into the holiday season in most of its global markets.
Apple shares were marked 0.5% lower in pre-market trading to indicate an opening bell price of $150.35 each.
3. — Activision Slumps On Concerns Over FTC Challenge to Microsoft Deal
Activision Blizzard (ATVI) – Get Free Report shares slumped lower in pre-market trading amid reports that the video game maker’s proposed $69 billion takeover by Microsoft (MSFT) – Get Free Report will be challenged by antitrust authorities in the US and Europe.
Politico reported Wednesday that the US Federal Trade Commission is preparing to file an antitrust suit to prevent the merger, which was unveiled earlier this year, a move that would follow the European Union’s decision to open a full-scale investigation into the deal on November 8 .
Officials are concerned the merger would limit customer choice, and thus raise prices, if Microsoft were to limit the release of new games, such as the popular Call of Duty franchise, exclusively to its XBox gaming platform.
Activision shares were marked 3.12% lower in pre-market trading to indicate an opening bell price of $74.20 each.
4. — Ford Edges Lower After Recalling 634,000 SUVs
Ford Motor (F) – Get Free Report shares edged modestly lower in pre-market trading after the carmaker unveiled plans to recall more than 630,000 vehicles over fire risks linked to possibly damaged fuel injectors.
Ford said the recall will cover certain Bronco Sport and Escape SUVs made between 2020 and 2023, and include 520,000 US-made cars as well as 114,000 sold in overseas markets.
Late last month, Ford narrowed its full-year profit guidance and booked a $2.7 billion charge linked to the wind-down of its self-driving business.
The moves clouded an otherwise solid third quarter earnings update, which saw Ford post an adjusted bottom line of 30 cents per share on revenues of $39.4 billion. Ford now sees full-year profits of around $11.5 billion, down from a prior estimate of between $11.5 billion to $12.5 billion.
Ford shares were marked 0.1% lower in pre-market trading to indicate an opening bell price of $14.02 each.
Thanksgiving shopping is expected to attract nearly 170 million customers over the four-day period, the National Retail Federation estimated, as buyers look for bargains that they largely passed over in last month’s early retail push.
Major retails such as Target (TGT) – Get Free ReportWalmart (WMT) – Get Free Report and Amazon (AMZN) – Get Free Report launched early October sales in an effort to attract shoppers and shift billions in inventory that was left over from the summer lull. However, with shoppers looking to spend less over the whole of the holiday season, experts are predicting a rush back to stores of around 166.3 million people, an 8 million increase over at least year, between Thanksgiving Thursday and Cyber Monday.
“While there is much speculation about inflation’s impact on consumer behavior, our data tells us that this Thanksgiving holiday weekend will see robust store traffic with a record number of shoppers taking advantage of value pricing,” said National Retail Federation president Matthew Shay, . “We are optimistic that retail sales will remain strong in the weeks ahead, and retailers are ready to meet consumers however they want to shop with great products at prices they want to pay.”