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Top 5 Things to Know in the Market on Friday

5 key factors for the markets on Friday
5 key factors for the markets on Friday

Investing.com - Here are the top five things you need to know in financial markets on Friday, August 17:

1. Turkish lira dives on threat of new sanctions

Turkey remained in the spotlight as U.S. Treasury Secretary Steven Mnuchin’s announced that the U.S. is prepared to slap Turkey with more sanctions if its President Recep Tayyip Erdogan refuses the quick release of an American pastor.

Trump later tweeted that the U.S. “will pay nothing” for the release of the pastor Andrew Brunson, who is on house arrest in Turkey over terrorism charges.

The Turkish lira took a dive in early morning trade, falling more than 7% against the dollar, now having lost two-thirds of its value since the beginning of the year.

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At 6:12 AM ET (10:12 GMT), USD/TRY was up 5.60 at 6.1608.

2. Global stocks flinch as Turkish woes return

Global stocks were mostly lower on Friday as a renewed decline in the Turkish lira brought risk aversion to the forefront. The currency tumbled against the dollar on Friday as the U.S. stance over pastor Andrew Brunson’s arrest hit market sentiment.

U.S. futures extended losses as the lira fell in early morning trade. At 6:15 AM ET (10:15 GMT), the blue-chip Dow futures lost 39 points, or 0.15%, S&P 500 futures fell 5 points, or 0.18%, while the Nasdaq 100 futures traded down 16 points, or 0.21%.

Elsewhere, European shares also extended losses as fears over the region’s banks’ exposure to Turkey sent buyers fleeing.

Earlier, Asian stocks closed mixed on Friday. While Japan’s Nikkei 225 seemed content to follow earlier gains on Wall Street, China’s Shanghai Composite ended lower as caution reigned ahead of further trade talks between Beijing and Washington.

3. U.S. consumer in focus

As a slow week for top tier economic data comes to a close, traders will focus on the consumer mindset later on Friday.

The University of Michigan will release its preliminary measure of August consumer sentiment at 10:00 AM ET (14:00 GMT).

Economists expect that the index rose to 98.1 from 97.9 in July.

Earlier in the week, July retail sales gave a better-than-expected reading, upping optimism for the American consumers’ capability to continue to support the solid economy.

The consumer has also been showing strength if the latest batch of retail earnings are anything to go by. Walmart (NYSE:WMT) was the latest to post strong numbers, sending its stock soaring on Thursday and contributing to the bullish sentiment in stocks.

Nordstrom (NYSE:JWN) was also gave a solid showing in quarterly numbers after Thursday’s market close, sending its stock surging in extended hours.

4. Mixed earnings signals to end the week

As mentioned, market participants were expected to react positively on Friday to Nordstrom’s strong earnings. The department store reported a same-store sales increase that smashed expectations and increased its profit guidance for the year. Shares surged more than 9% in pre-market trade Friday.

Tech stocks however, would likely be under pressure as Nvidia (NASDAQ:NVDA) tumbled 4.06% ahead of the open after the company issued a softer-than-expected guidance when it released quarterly results after Thursday’s close.

Applied Materials (NASDAQ:AMAT) was also expected to add to the carnage with shares sinking 5.69% after the chipmaker forecast weaker-than-expected earnings per share for its fiscal fourth quarter.

Deere & Company (NYSE:DE) will be Friday’s spotlight on the earnings front as the company reports before the opening bell.

5. Oil headed for 7th weekly decline ahead of rig count

Oil prices managed to eke out a second day of gains of Friday, paring yet another sharp weekly decline.

The recovery occurred on the back of hopes that a meeting between Chinese and U.S. officials later in August will seek to offset recent tensions.

Markets were worried a potential full-blown trade war between the U.S. and China would slow global economic growth and curb energy consumption, while a standoff between the U.S. and Turkey subsequently sparked fears of contagion among emerging markets.

U.S. crude was headed for a drop of 3% this week and Brent was on track for weekly losses of 1.7%.

Later on Friday, Baker Hughes will release its most recent data on U.S. crude production.

The U.S. rig count, an early indicator of future output, rose by 10 to 869 last week, the highest level since March 2015, according to the oilfield services firm.

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