Top 5 Things to Know in the Market on Friday

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Investing.com - Here are the top five things you need to know in financial markets on Friday, July 19:

1. Iran denies Trump claim of destroying drone, oil jumps

Oil prices jumped more than 2% overnight on Friday after U.S. President Donald Trump confirmed that the Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East.

Crude pared some of those gains however as Abbas Araqchi, Iranian deputy foreign minister, denied the report, saying that Tehran had “not lost any drone in the Strait of Hormuz nor anywhere else” and said that the U.S. may in fact have shot down one of its own by mistake.

Escalating tensions in the Middle East have supported oil prices on speculation that they could impact supply.

2. U.S. stocks set to open higher on Microsoft (NASDAQ:MSFT), Fed support

U.S. futures pointed to a higher open as better-than-expected earnings and cloud business revenue from Microsoft, along with hopes for policy easing from the Federal Reserve, supported sentiment

Wall Street closed higher on Thursday after New York Fed President John Williams said the central bank needed to “act quickly” when the economy was slowing and rates were low. Although he made no reference to the next move at the July 30-31 meeting, markets increased their bets for a 50 basis point to 46%. A quarter-point reduction is fully priced in.

Potentially adding fuel to the dovish fire, St. Louis Fed President James Bullard will speak at an annual meeting of the Central Bank Research Association. Bullard was the only policymaker to dissent at the Fed’s June meeting based on his preference for a 25 basis point cut. However, he has since said he was unconvinced of the need for anything bigger.

In economic data, the University of Michigan will report its preliminary consumer sentiment index for July at 10:00 AM (14:00 GMT).

3. Boeing (NYSE:BA) to take $4.9 billion charge on 737 MAX grounding

Boeing has announced that it would take an after-tax charge of $4.9 billion for the second quarter ahead of releasing those earnings on July 24.

The company explained that the charge was to cover estimated disruptions from the ongoing grounding of its 737 MAX planes due to two fatal crashes. Various airlines have said they would seek compensation from Boeing.

Shares were still up nearly 2% in premarket trade and Morgan Stanley said the gain was an indication that investors were comfortable with the amount of the charge and Boeing’s production plans.

4. AB Inbev pulls in $11.3 billion from unit disposal

Anheuser Busch Inbev (NYSE:BUD) saw shares rise more than 4% in premarket trade after announcing the sale of its Australian unit to Japan’s Asahi Group (T:2502) for $11.3 billion, including debt.

The move is a fallback option for the company, which has made cutting debt its top priority.

AB InBev canceled the IPO of its Asian businesses last week after trying to raise around $10 billion due to market conditions in what would have been the world’s largest listing of the year.

5. WeWork co-founder cashes out of $700 million ahead of IPO

Adam Neuman, co-founder of WeWork (NYSE:WEWK), has reportedly cashed out more than $700 million from the company through a mix of stock sales and debt, according to The Wall Street Journal, which cited people familiar with the matter.

The amount was tagged as unusual, as founders typically tell after the company’s initial public offering.

The company is reportedly planning an analyst day on July 31 as its prepares for its IPO.

WeWork was recently valued at $47 billion in a private fundraising round, making it one of the most valuable private companies in the world.

-- Reuters contributed to this report.