Here are the most important news items that investors need to start their trading day:
1. Second half begins
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 30, 2022.
Brendan Mcdermid | Reuters
Markets are looking to rebound following the worst first half for stocks in 52 years. But inflation, the major culprit behind that weak performance in equities markets and other sectors, didn’t appear to be abating at any meaningful rate. Indeed, futures were down Friday morning, ahead of the long weekend, as investors gird for a potentially rocky earnings season. U.S. stock markets will be closed Monday for the Fourth of July.
2. Inflation surges in euro zone
European Central Bank President Christine Lagarde attends a debate during a plenary session at the European Parliament on February 14, 2022 in Strasbourg, eastern France.
Frederick Florin | Afp | Getty Images
Surging prices are taking their toll on other major economies as well. The European Central Bank on Friday said year-over-year inflation rose 8.6% in June. The ECB is expected to raise rates for the first time in 11 years later this month, and is projected to follow through with another increase in September. Earlier this week, ECB President Christine Lagarde said the central bank would move even faster if inflation didn’t improve, although she still expects growth. The ECB’s rates have been negative since 2014.
3. Treasury yields slip
Traders work on the floor of the New York Stock Exchange on June 16, 2022.
Xinhua News Agency | Xinhua News Agency | Getty Images
U.S. 10-year Treasury yields fell to a near one-month low in early morning trading Friday, before recovering somewhat. Investors are weighing the potential for a recession. Bond traders will chew over more economic data Friday morning, with ISM manufacturing data and light vehicle sales for June, along with construction spending for May, set to be released at 10 a.m. ET.
4. Meta warning
The chief product officer at Facebook parent Meta warned employees in a memo that they were facing “serious times” and that the company would have to “prioritize more ruthlessly” to contend with a tough environment for its advertising business. “We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets,” wrote the executive, Chris Cox.
5. Kohl’s ends sale talks
The Kohl’s logo is displayed on the exterior of a Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
Shares of retailer Kohl’s fell dramatically Friday morning after the company confirmed CNBC’s Thursday night scoop that it had terminated sale talks with Franchise Group, the company that owns The Vitamin Shoppe, among other brands. The stock dipped under $30 during premarket trading. Franchise Group had submitted a revised offer of $53 a share after earlier offering about $60 a share. Earlier this year, Kohl’s rejected a $64-a-share proposal from a Starboard-backed bidder. Kohl’s also lowered its outlook as the retailer sees softening in consumer spending.
— CNBC’s Fred Imbert, Silvia Amaro, Sam Meredith, Jonathan Vanian and Lauren Thomas contributed to this report.