Tuesday August 28th

28-08-2018

US stock futures set for a tepid open after boost from US-Mexico trade deal

U.S. stock index futures fluctuated ahead of Tuesday's open, as investors kept an eye on news coming out of the political space. Around 8 a.m. ET, Dow Jones Industrial Average futures rose 41 points, indicating a gain of 65.36 points at the open, with the S&P 500 and Nasdaq 100 futures pointing to an upbeat start to the day. Markets in Asia and Europe tried for gains Tuesday, digesting news that the U.S. and Mexico had secured a new trade deal on Monday,which would look to replace NAFTA, an accord that currently includes both countries and Canada. According to President Donald Trump, this pact would be named "The United States-Mexico Trade Agreement"; and will last for 16 years, with it being placed under review every six years. Negotiations with Canada has yet to commence, but the U.S. leader added that if Canada chose to negotiate fairly, the U.S. would be open to that. Treasury Secretary Steven Mnuchin told CNBC's "Squawk Box" on Tuesday he is hopeful a deal with Canada will get done, but added he is prepared to "move forward with Mexico." Consequently, investors will be keeping a close eye on this trade news to see what these developments could mean for the U.S. and its relationships going forward, in particular to China. Trading spats between the States and other major economies have put markets on a roller-coaster ride as of late, even as positive economic data and earnings are released. The S&P 500 and Nasdaq Composite closed at all-time highs on Monday. The Nasdaq also broke above 8,000 for the first time ever. Trump touted the milestone in a tweet Tuesday, saying: "NASDAQ has just gone above 8000 for the first time in history!" More fresh economic figures are due to be published Tuesday. At 8:30 a.m. ET, advance economic indicators will be released, The S&P/Case-Shiller national index rose a seasonally adjusted 0.3% and was up 6.2% for the year in June. The 20-city index rose a seasonally adjusted 0.1% and was up 6.3% compared with a year ago, consumer confidence and the Richmond Fed survey of manufacturing activity are scheduled to come out, followed by the Dallas Fed's Texas Service Sector Outlook survey at 10:30 a.m. ET. Asia markets were broadly higher on Tuesday afternoon following yet another day of record highs on Wall Street, as the U.S. and Mexico announced a new trade agreement. The Nikkei 225 ended the trading day largely flat, closing at 22,813.47, with the country's shipping sector up by 2.3 percent. South Korea's Kospi closed in positive territory at 2,303.12, up by 0.17 percent. Over in the Greater China markets, Hong Kong's Hang Seng index lost some of its earlier gains, but still traded up by 0.26 percent as of 3:01 p.m. Mainland Chinese stocks, meanwhile, closed in relatively cautious territory. The Shanghai composite ended the trading day down by 0.1 percent at 2,777.981 while the Shenzhen composite closed largely flat around 1,497.70. The oil price rose towards its highest since early July on Tuesday, thanks to evidence of still-modest increases in output from OPEC and improving Chinese refining demand. Brent crude oil futures were at $76.65 a barrel by 0913 GMT, up 44 cents from their last close and at their highest since July 11, while U.S. crude futures were up 17 cents at $69.04 a barrel. Gold inched down on Tuesday from a two-week high hit in the previous session, as the dollar firmed against yuan, making the precious metal expensive for buyers in the world's biggest consumer China. China's central bank raised its daily guidance rate for the yuan by the most in nearly 15 months on Tuesday, sparking a demand for dollars. Spot gold fell 0.2 percent to $1,209.04 an ounce at 0358 GMT, after hitting its highest since Aug. 13 at $1,212.38 on Monday. U.S. gold futures were down 0.1 percent at $1,215.40 an ounce.