US stocks are expected to open mixed on Friday’s open. Apprehension over rising inflation data in the light of hints of a rate hike from the Federal Reserve will see the Dow Jones and S&P 500 open lower. However, an earnings beat from Google (NASDAQ:GOOGL) should see a second new record high this week for the Nasdaq Composite.
The US consumer price index for June is expected to come in at a measly 0.1% year-over-year. The more relevant data will be core consumer prices that strip out the effect of the drop in oil prices. Core CPI is expected to rise to 1.8%, not far short of the Federal Reserve’s 2% inflation target.
The Fed only needs inflation to be heading towards 2%, not at 2% to hike rates. A number matching or higher than last month’s 1.7% supports a September rate hike, a decline adds weight to belief in a 2016 hike.
Google shares having already gained 3.5% in a strong day for tech stocks on Thursday could be set to add another 10% on top of that on Friday morning after topping second quarter earnings estimates. That would put Google shares at a new record high and a market cap of over $400bn.
Following well-received results from rival Intel (NASDAQ:INTC), AMD’s lower revision to third quarter earnings coupled with a second quarter quarterly loss could see shares drop as much as 5% on Thursday’s open.
Earnings are expected from General Electric (NYSE:GE) and Honeywell (LONDON:HONH)on Friday.
Futures suggest the:
S&P 500 will open 3 points lower at 2,121 with the
Dow Jones expected to open 45 points lower at 18,075 and the
Nasdaq 100 24 points higher at 4,618
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