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The Friday Market Minute

  • Global stocks gain amid steady progress in U.S.-China trade talks paired with weakening data in key G10 economies.
  • China's Shanghai Composite has best week in nearly three years amid trade optimism and bets on further stimulus in the world's second largest economy.
  • Germany narrowly avoids recession with flat Q4 growth, but trade and Brexit uncertainty keep European markets in check.
  • Global oil test fresh 2019 highs but gains are capped by record U.S. production rates, which hit 12 million barrels per day last week, and a build in domestic crude inventories.
  • Kraft Heinz shares shed $12 billion in after-hours trading after weaker-than-expected fourth quarter earnings, an SEC notice and a grim 2019 profit outlook hammered shares in one of Warren Buffett's biggest investments.
  • U.S. equity futures suggest a solid open on Wall Street ahead of an Oval Office meeting between President Donald Trump and China's Vice Premier Liu He.

Market Snapshot

Global stocks traded higher Friday, setting up a positive session on Wall Street, as investors continue to eye headline moves in U.S.-China trade talks while navigating weaker-than-expected data in some of the world's biggest economies.

China's Vice Premier, Liu He, is scheduled to meet with President Donald Trump in the Oval Office later today as this week's round of trade talks winds down in Washington. Multiple media reports suggest significant progress has been made between the two sides, with the very real possibility that next week's March 1 deadline could be extended, although issues such as intellectual property protection and currency manipulation remain sticking points in the months-long talks.

Set against that optimism, however, has been a series of weaken economic data points, including softer-than-expected existing home sales in the United States, slower manufacturing output in Europe and the first contraction in business activity in the U.S. mid-Atlantic region in nearly three years.

Earlier this week, Japan also posted notably softer export figures, while China's housing market saw new home prices fall to a nine-month low last month. 

Still, with trade talk progress and the hope of deeper stimulus from both the government and the People's Bank of China, stocks in the world's second largest economy had their best week in nearly three years, adding 4.5% to the Shanghai Composite index, which closed at 2,804.23 points. Japan's Nikkei 225, meanwhile, snapped a four day winning streak to finish the Friday session 0.18% lower at 21,425.51 points.

Early indications from U.S. equity futures also suggest modest gains on Wall Street Friday, with contracts tied to the Dow Jones Industrial Average marked 103 points to the upside while those linked the S&P 500 are indicating a 10.2 point advance for the broader benchmark.

Kraft Heinz (KHC) shares are likely to be in focus Friday after the food brands group shed more than $12 billion in market value in after-hours trading last night following a much weaker-than-expected fourth quarter earnings report that included a writedown of key assets, a softer 2019 outlook and news that the Securities and Exchange Commission is looking into its accounting practices. 

Europe stocks booked early-session gains, as well, with the Stoxx 600 rising 0.23% in the opening hours of trading, lead by basic material and technology stocks, while Britain's FTSE 100 added 0.4% in early London dealing.

Global oil prices were back to testing 2019 highs in early European trading, with a modestly weaker U.S. dollar, trade optimism and the impact of OPEC+ production cuts supporting the bulls. 

However, gains are likely to remain capped for the session after data from the U.S. Energy Information Administration showed domestic oil production hit an all-time high of 12 million barrels per day last week, helping crude exports to a record 3.6 million barrels per day. Both figures partly offset a rise in domestic inventories that took the total 3.7 million barrels higher to 454.5 million.

Brent crude contracts for April delivery, the global benchmark, were marked 28 cents higher from their Thursday close in New York and changing hands at $67.35 while WTI contracts for the same month were seen 24 cents higher at $57.20 per barrel.