Stock-index futures point to rally on U.S.-China trade hopes
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U.S. stock futures marched higher ahead of the open on Tuesday on renewed optimism over US-China trade talks, pointing to further gains for Wall Street a day after equities began the week with a strong rebound from sharp losses.
How are benchmarks trading [1[ads1]9659005] Dow Jones Industrial Average Futures
YMZ8, + 1.07%
shot up 224 points, or 0.9%, to 24.718, while S & P 500 futures
ESZ8, + 1.04%
gained 28 points, or 1.1%, to 2.672. Nasdaq-100
NQZ8, + 1.05%
jumped 97 points, or 1.4%, to 6.796.
On Monday, the Dow Jones Industrial Average
DJIA, + 0.95%
rose 34.31 points, or 0.1%, two to 24.423.26 while the S & P 500
SPX, + 1.05%
gained 0.2% to 2.637.72 and the Nasdaq Composite Index
COMP, + 1.20%
advanced 51.27 points, or 0.7%, to close at 7,020.52.
Gains came after losses that had left the Dow down more than 500 points, the S & P off 50 points and the Nasdaq down 81 points. The S & P 500 closed 1.9% above its intraday low, its biggest such bounce since Feb. 6; The Dow closed 2.1% above its session low for its largest intraday, upside reversal since April 4, according to Dow Jones Market Data.
What's driving the market?
The U.S. and China launched formal trade talks with a phone call including Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, where they discussed changes to fundamental Chinese economic policies.
President Donald Trump weighed in with a tweet, citing "Very productive conversations" with China and said two, "Watch for some important announcements!"
Very productive conversations going on with China! Watch for some important announcements!
– Donald J. Trump (@realDonaldTrump) December 11, 2018
U.S. stock futures were further boosted early Tuesday after a report from Bloomberg, indicating that China is taking steps to reduce tariffs on cars imported from the United States, news that sent shares of automakers Ford Motor Company
F, + 1.94%
and General Motors Co.
GM, + 2.99%
higher in premarket trade.
Tuesday gains would build on a Monday afternoon rally that was powered by the belief that the U.S. Economie is resilient genoeg om voort te groeien tegen een gezonde snelheid in 2019 en daarbuiten, in part dankzij reacties van invloedrijke banken zoals J.P. Morgan and Goldman Sachs That Fears About U.S. Economic growth is overblown.
Read: Stock market on cliff's edge as S & P 500 tests this crucial support level: chart watcher
What data are in focus?
The National Federation of Independent Businesses issued its small business optimism index for November, showing it fall 104.8 from a 107.1 reading in October, it's lowest reading since May.
The wholesale cost of goods and services rose by 0.1% in November, above consensus estimates of a 0.1% decline, according to a MarketWatch poll of economists. Year-over-year rises in producer prices, however, fell to 2.5% from 2.9%, according to the Labor Department.
What are strategists saying?
The "fragile risk appetite" on display as stocks rallied into the close on Monday "got a boost overnight following reports that China's Vice Premier Liu He had phone talks about trade with US Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, "Charalambos Pissouros, Senior Market Analyst with JFD Brokers, wrote in a Tuesday note to clients.
" As for our view, reports of phone calls are far from suggesting that the dispute is near to be resolved, while Lighthizer's comments over the weekend keep the door open for further escalation, "he wrote, referring to the trade rep's insistence that the American-imposed 90-day moratorium on new tariffs is a hard deadline.
" We specifically point out yesterday dat de hoeveelheid marktoverzettingen verhoogd is naar niveaus die voorstellen dat een rally is dichtbij. Indeed, yesterdays technical recovery from the markets lows points to another positive session in the business, "said Peter Cardillo, chief economist at Spartan Capital Securities, in a note to clients.
What stocks are in focus?
Ford stock was up 2.9% in premarket action, while GM rose 2.9%.
Semiconductor stocks are also trading higher in premarket action, after news of the launch of formal U.S.-China trade talks. Qorvo Inc. .
] + 3.07%
stock is up 2.5%, shares Seagate Technology Inc
STX + 2.08%
shares are rising 2.4% and Advanced Micro Devices
AMD, + 0.95%
shares advanced 2.8%.
Shares of Francesca's Holdings Corp. .
FRAN, -10.28%
are in focus Tuesday, after the firm announced a quarterly loss and a decline in large foot traffic. The stock is trading down 11.1% in premarket action.
Pfizer Inc . shares are falling 1% before the bell Tuesday, after the stock was downgraded to neutral from overweight by JPMorgan.
How are other markets trading?
Asian stocks closed broadly higher Tuesday, with Chinese benchmarks leading the way. The Shanghai Composite Index
SHCOMP, + 0.37%
rose 0.4% the Shenzhen Composite
399106, + 0.85%
oce 0.9%, while Japan's Nikkei
NIK, -0.34%
ended the day lower.
European markets were advancing Tuesday, with the Stoxx Europe 600
SXXP, + 2.22%
up roughly 2.1% on the day.
Crude oil
CLF9, + 2.43%
was also advancing, up 1.4%, while gold
GCG9, + 0.18%
edged 0.2% higher and the U.S. dollar
DXY, + 0.04%
slipped by 0.2%.
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