Here are the most important news, trends and analysis that investors need to start their trading day:
1. Stocks to open lower but July still tracking for gains
Wall Street was set to open lower on the final trading day of July as investors get three Dow stock earnings and another reading on inflation to digest. Nasdaq futures were leading the way down Friday, with a decline of more than 1% as Amazon shares nearly 7% in the premarket after its first revenue miss in three years. The Dow Jones Industrial Average and S&P 500 hit all-time highs during Thursday’s trading session and broke two-day losing streaks. But they failed to top Monday’s record closes. The Nasdaq advanced modestly, but still finished about 0.4% away from its latest record close on Monday. All three stock benchmarks were tracking for solid monthly gains.
2. Fed’s favorite inflation gauge set for release before the bell
The Federal Reserve’s favorite inflation gauge is set for release at 8:30 a.m. ET. Economist expect the government’s core personal consumption expenditures price index for June to rise 3.6% on a year over year basis. That would follow a 3.4% advance in May, which was the fastest increase since the early 1990s. At the conclusion of its July meeting on Wednesday, the Fed noted “progress” on inflation and employment goals, which was seen as a signal that changes to easy-money policies, particularly monthly bond buying, could be on the way. Central bankers made no adjustments to asset purchases and near zero interest rates.
3. Mixed stock reactions from Dow companies’ earnings
Dow stock Chevron reported a second straight profitable quarter Friday as improving demand for petroleum products and a jump in oil prices boosted operations. The company also reinstated its share repurchase program. The oil giant earned an adjusted $1.71 per share on $37.6 billion in revenue. Both topped estimates. Shares rose about 1.5% in the premarket. Exxon, no longer a Dow stock, also beat estimates with earnings and revenue. Shares rose in the premarket.
Caterpillar, another Dow component, dropped nearly 2.5% in Friday’s premarket, despite the heavy equipment maker saying it earned an adjusted $2.60 per share on nearly $12.9 billion in revenue. The industrial bellwether and proxy for global economic activity has been benefiting from higher infrastructure spending around the globe.
Procter & Gamble on Friday topped estimates with quarterly earnings and revenue as consumers bought more premium health care and personal care products. The Dow stock rose 1% in the premarket. P&G reported a per-share profit of $1.13 on almost $19 billion in revenue. However, the company warned that increasing commodity costs could hit its earnings in the upcoming year.
4. Amazon posts another $100 billion quarter but still misses
Amazon said Thursday afternoon that second-quarter revenue grew by 27% year over year to more than $113 billion, the third $100 billion quarter in a row but actually a slower pace of growth from the blistering 41% advance in the year ago period. The e-commerce and cloud giant reported Q2 earnings per-share of $15.12, which exceeded expectations. Looking ahead, Amazon warned about lower sales numbers and a lower growth rate for the third quarter. The guidance echoed similar warnings from Facebook and Apple, which said this week that revenue growth rates would decelerate from pandemic highs.
5. CDC expected to publish data behind new mask recommendations
Unpublished CDC data that informed Tuesday’s decision to recommend that fully vaccinated people begin wearing masks indoors again in places with high Covid transmission rates is expected to be released Friday, according to The Washington Post. The internal CDC document, obtained by the Post, reveals that the delta variant is as contagious as chickenpox. It also shows vaccinated people who get infected by delta can spread it just as easily as unvaccinated people. Members of Congress were briefed on the CDC data by Director Rochelle Walensky on Thursday, the Post reported.
— Reuters contributed to this report. Follow all the market action like a pro on CNBC Pro. Get the latest on the pandemic with CNBC’s coronavirus coverage.