Market Snapshot: Stocks on track to build on records as investors remain optimistic on U.S.-China trade talks

This post was originally published on this site

Stock-index futures pointed to a higher start for Wall Street on Monday, with equities set to build on last week’s push to records as investors remain optimistic over U.S.-China trade talks.

How are the major benchmarks doing?

Futures on the Dow Jones Industrial Average YMZ19, +0.32%  rose 92 points, or 0.3%, to 28,045, while S&P 500 futures ESZ19, +0.22%  gained 6.95 points, or 0.2%, to 3,124.25. Nasdaq-100 futures were up 26.75 points, or 0.3%, at 8,345.50.

Read: With Dow, S&P 500 at records, investors ignore ‘material deterioration’ in global economy

The Dow DJIA, +0.80%  last week rose 1.2%, ending Friday at 28,004.89 topping the 28,000 milestone for the first time as it posted its 11th record close of 2019. The S&P 500 SPX, +0.95% logged a 0.9% weekly rise, also setting a record Friday with a finish at 3,120.46. The Nasdaq Composite COMP, +0.73%  also posted an all-time closing high Friday, capping a 0.8% weekly gain with a finish at 8,540.83.

See: Why Dow 28,000 could mark that ‘blowoff top’ bears have been predicting

What’s driving the market?

Analysts said optimism over U.S.-China trade talks remain a pillar of support for equities. Chinese state media outlet Xinhua over the weekend said Chinese Vice Premier Liu He, the country’s top trade negotiator, held a phone conversation with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Saturday, describing the discussions as “constructive.”

The Trump administration is likely to issue Monday a 90-day extension of a license allowing U.S. companies to continue doing business with Chinese telecom giant Huawei Technologies Co., Reuters reported Sunday night. Huawei was added to a federal list of restricted entities earlier the year, which are suspected as working against U.S. national security interests, and its status has been seen as a key issue in trade negotiations.

Meanwhile, China’s central bank on Monday lowered the interest rate on its regular reverse repurchase open market operations for the first time since October 2015 in an effort to boost market confidence and buoy slowing growth.

“If China wants to ease the short-term economic pain, lower tariffs via a phase one trade deal would go a long way,” said Jasper Lawler, head of research at London Capital Group, in a note.

“Optimism that a partial trade deal can be done largely explains the rally in U.S. equities that took the Dow Jones to 28,000 for the first-time last week,” he said. “‘Constructive’” discussions in a phone call between the two sides over the weekend continues the positive mood music about a phase one deal.”

Analysts said they were also keeping an eye on Hong Kong, as protests continued and police stormed a university campus after an all-night siege.

The economic calendar is light, featuring a home-builder index for November at 10 a.m. Eastern Time.

Which stocks are in focus?

Shares of Boeing Co. BA, +1.15%  edged 0.9% higher in premarket action after it announced that SunExpress exercised options for 10 additional 737 MAX 8 aircraft, with a value of $1.2 billion, according to list prices. The order adds to the previous 32 MAX planes ordered by SunExpress.

Shares of Ford Motor Co. F, +1.82%  were up 1.2% in premarket trade after the auto maker announced Sunday its “Mustang Mach E,” it’s first all-electric SUV.

HP Inc. HPQ, +0.25%  rejected a $33.5 billion takeover offer from Xerox Holdings Corp. XRX, +0.75%  Sunday, saying the cash-and-stock offer undervalues the company, but said it remains open to exploring other options for consolidation.

On Sunday, Saudi Aramco said it would aim for a valuation of $1.6 trillion to $1.7 trillion from the planned initial public offering of the state-owned energy giant, falling well short of the initial $2 trillion targeted by Saudi Crown Prince Mohammed bin Salman. That would still make the oil giant’s trading debut the world’s biggest ever IPO by valuation.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.99%  rose 1.8 basis points to trade at 1.853% after falling 9.7 basis points during the previous five trading days amid mixed global economic data.

In commodities markets, a barrel of West Texas Intermediate crude for December delivery CLZ19, -0.19%  fell 16 cents, or 0.3% to trade at $57.56 and the price of gold for December delivery GCZ19, -0.76%  fell $9, or 0.6%, to $1459.30 an ounce.

The U.S. dollar edged about 0.1% lower relative to a basket of its trading rivals, according to the ICE U.S. Dollar index DXY, -0.06%.

In Asia overnight, stocks traded higher, with the China CSI 300 000300, +0.80%  gaining 0.8%, Japan’s Nikkei 225 NIK, +0.49%  advancing 0.5% and Hong Kong’s Hang Seng HSI, +1.35%  limbing 1.4%.

In Europe, stocks were mixed; the Stoxx Europe 600 SXXP, +0.26%  was up 0.2%.

Add Comment