Thursday July 5th

5-07-2018

Dow set to jump nearly 200 points, GM shares jump

U.S. stock index futures jumped ahead of Thursday’s open as the Trump administration is reportedly hinting at a concession on tariffs against European cars. Dow Jones Industrial Average futures rose 187 points, indicating a positive open of 195.18 points. Nasdaq 100 and the S&P 500 futures also indicated solid gains at the start to their respective trading session. Reuters reported Thursday, citing an industry source, that the U.S. ambassador to Germany told industry executives that President Donald Trump could hold off on implementing tariffs on European cars in exchange for concessions. Shares of General Motors and Fiat Chrysler jumped 2.4 percent and 6.8 percent in the premarket, respectively. Boeing and Caterpillar, two companies sensitive to trade news because of their overseas revenue exposure, climbed 1 percent each. Investors have been grappling with increasing trade tensions for the past few months. On Friday, the U.S. is expected to activate levies on $34 billion in Chinese-made goods, with Beijing expected to respond with its own levies on U.S. goods. Tech shares jumped on Thursday, as Micron surged nearly 4 percent. The company confirmed China is blocking some chip sales, but noted the situation will only have a minor impact on its revenue. Shares of Facebook, Apple, Alphabet and Amazon also rose in the premarket. The Federal Open Market Committee is expected to publish the minutes from its latest central banking meeting at 2 p.m. ET. At the last meeting in June, the Fed decided to increase its benchmark short-term interest rate by a quarter percentage point. In addition, the central bank signaled that two more rate hikes were expected to occur by year-end. Investors will pore through the minutes looking for more clues about future monetary policy moves by the Fed. The minutes will be released after data from ADP and Moody's Analytics showed jobs grew by 177,000 in June, missing expectations. Jobs growth for May was revised higher, however. ADP and Moody's released their data ahead of the government's monthly payrolls report, which is due Friday. Asian stocks deepened their losses on Thursday, with major markets finishing the session lower as investors remained cautious the day before tariffs from the U.S. and China are due to be implemented. On the mainland, losses on the Shanghai composite slid 0.91 percent to close at 2,733.98, while the smaller Shenzhen composite dropped 2.2 percent. Hong Kong's Hang Seng Index lost 0.63 percent by 3:07 p.m. Japan's Nikkei 225, meanwhile, lost 0.78 percent, or 170.05 points, to close at 21,546.99, but was off its session low. Elsewhere, South Korea's Kospi reversed early gains, tracking lower by 0.35 percent to close at 2,257.55. Oil traded near its highest in 3-½ years on Thursday, boosted by potential disruptions to flows from Iran and the Middle East despite a fresh demand from U.S. President Donald Trump that OPEC cut prices. U.S. West Texas Intermediate (WTI) crude futures were up 18 cents at $74.32 by 8:38 a.m. ET (1238 GMT). The contract hit a high of $75.27 a barrel going back to November 2014 earlier this week. Brent crude futures fell 25 cents to $77.99 per barrel. Gold drifted lower on Thursday despite a weaker dollar as investors worried that U.S. Federal Reserve minutes would highlight the prospect of further rate hikes. Spot gold was flat at $1,255.71 an ounce. The metal touched a one-week high of $1,261.10 in the prior session and had gained over $20 from Tuesday's low of $1,237.32, its weakest since Dec. 12. U.S. gold futures for August delivery were up 0.28 percent at $1,257.