Exxon and Chevron report with Brent near $115, as gold slips under $4,000 and the Fed's quiet period ends
Oil is heading for a fourth straight monthly gain after Houthi attacks on Saudi Arabia, and the two biggest U.S. oil companies report before the bell. Wage data at 8:30 a.m. and the return of Fed speakers round out Friday.
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While tech stocks wrestle with AI spending, the oil patch is heading into its own earnings test with crude near multi-month highs. Exxon Mobil and Chevron, the two largest U.S. oil companies, report third-quarter results before Friday's open.
Brent crude, the global benchmark, traded around $114 to $116 a barrel early Friday, according to Report.az, Stockbiz and Bloomberg data cited by TradingView. U.S. benchmark West Texas Intermediate was near $103, those sources showed.
Why oil is rising
Prices climbed on supply concerns after Yemen's Iran-aligned Houthis stepped up attacks on Saudi Arabia, CNBC and Stockbiz reported. Bloomberg, as cited by TradingView, also pointed to signs the U.S. may resume military strikes against Iran. Oil is on track for a fourth straight monthly gain and the biggest since July, according to CNBC and Stockbiz. Stockbiz estimated Brent's October gain at nearly 14%.
Higher oil feeds directly into the inflation picture. Thursday's personal consumption expenditures report showed prices rising 0.5% in September and 3.6% from a year earlier, according to CNBC and Kiplinger, and Reuters said a war-related oil supply crunch was feeding into broader inflation.
What Exxon and Chevron are expected to show
Expectations are high. Benzinga's estimates put Exxon's earnings at about $4.01 to $4.08 a share, versus $1.88 a year earlier, on revenue of roughly $103 billion to $105 billion. For Chevron, estimates range from about $4.82 to $4.88 a share, versus $1.85 a year ago, according to Benzinga and Newsquawk. StockTitan's Nasdaq-based tables show similar figures.
Both stocks head into the reports near record highs. StockCharts noted on Wednesday that Exxon and Chevron had broken to new highs this month, and Benzinga data showed each trading less than 2% below its 52-week high.
Guidance may matter more than the quarter itself. CNBC said spending plans and outlooks would be closely watched, since a big earnings jump is largely expected. Chevron CEO Mike Wirth is scheduled to lead the company's call at 11 a.m. ET; Exxon's call is set for 9:30 a.m. ET, according to the companies' notices.
Gold slips below $4,000
Gold is moving the other way. Spot gold fell 0.6% to about $3,997 an ounce in Asian trading, CNBC reported, as higher oil prices and the inflation data strengthened the case for another Fed rate increase. Stockbiz also showed spot gold below $4,000, and both outlets said the metal was on track for a second straight monthly decline. Silver fell about 2% to near $51 to $52 an ounce, CNBC and Stockbiz reported.
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Rates and the Fed
The 10-year Treasury yield fell about 5 basis points to roughly 4.93% early Friday, according to CNBC, while the 2-year yield dropped to about 4.59%. ING described the 10-year's move as a decisive gap away from 5%, driven more by the mood in tech stocks than by economic data.
The Federal Reserve held its benchmark rate at 3.75% to 4% on Wednesday, and Chair Kevin Warsh said policymakers were not on a set course. "If we had a firm conclusion about the conduct of monetary policy, we'd announce it to much fanfare today," he said, as quoted by CNBC. Traders still lean toward a December rate increase, CNBC and other outlets reported.
Friday also marks the end of the Fed's post-meeting blackout, meaning officials can comment publicly again, CNBC noted on Thursday. Any remarks on December could move rate expectations.
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Friday's calendar
- 8:30 a.m. ET: third-quarter employment cost index, which tracks wages and benefits.
- 9:45 a.m. ET: Chicago PMI for October.
- Before the open: Exxon Mobil, Chevron, AbbVie, AstraZeneca, BP, General Dynamics and Regeneron report.
- 1 p.m. ET: Baker Hughes weekly rig count.
Next week brings the September JOLTS job openings report on Tuesday and the October jobs report on Friday, according to CNBC, along with the U.S. midterm elections on Tuesday. For today, the oil companies' outlooks and the wage data are the two numbers most likely to shape the rate conversation.
