Tuesday May 22nd

22-05-2018

Futures point to a higher open after stocks break above 25,000

U.S. stock index futures futures pointed to a higher open Tuesday, continuing the positive sentiment that sent the Dow Jones industrial average above the 25,000 threshold Monday for the first time since March. At around 7 a.m. ET, Dow futures rose 53 points, indicating a higher implied open of 50.71 points. Nasdaq 100 and S&P 500 futures also indicated an upbeat start to the session for their respective markets. The rise in the premarket followed a strong rally on Wall Street during the previous session. On Monday, the Dow surged nearly 300 points while the S&P 500 and Nasdaq composite advanced 0.7 percent and 0.5 percent, respectively. Monday's rally followed remarks by Treasury Secretary Steven Mnuchin that the prospect of a trade war between the U.S. and China was "on hold" after an agreement to suspend tariff threats. In remarks to CNBC on Monday, Mnuchin added that there had been "very meaningful progress" with China on trade matters. "Now it's up to both of us to make sure that we can implement it," he told "Squawk Box." The comments helped ease trade tensions with China. Further smoothing those tensions was news that China will cut tariffs on some car parts and vehicles, sending auto stocks higher. Ford, GM and Tesla all rose in the premarket. In data, the Richmond Fed surveys are due out at 10 a.m. ET. Asian markets were subdued on Tuesday, with Japan and Australia finishing slightly lower while China advanced as oil prices edged higher. In Japan, the Nikkei 225 tracked lower by 0.18 percent, or 42.03 points, to close at 22,960.34 despite starting the session with slight gains. The broader Topix slipped 0.23 percent. Markets over in China, however, closed in positive territory after getting a boost late in the session. The Shanghai composite was little changed, up 0.02 percent at 3,214.53 and the Shenzhen Composite tacked on 0.38 percent to end at 1,855.16. International oil prices rose towards $80 a barrel on Tuesday, supported by concern that falling Venezuelan crude output and a potential drop in Iranian exports could further tighten global supply. Crude is trading at the highest since late 2014, underpinned by a supply-cutting deal among the Organization of the Petroleum Exporting Countries plus Russia and other non-members, and strong global demand. Brent crude, the global benchmark, rose 62 cents to $79.84 a barrel by 8:35 a.m. ET (1235 GMT). Last week, it topped $80 for the first time since November 2014. U.S. crude was up 25 cents at $72.60, having earlier traded at $72.72, its highest since November 2014. Gold edged up on Tuesday from a 2018 low, adding traction as the dollar fell off its five-month high, though risk appetite in the broader financial markets kept the precious metal's gains in check. The dollar lost momentum following a broad rally prompted by rising U.S. bond yields and the prospect of a resolution to U.S.-China trade tensions. A weaker dollar makes dollar-priced gold cheaper for non-U.S. investors. Spot gold had edged up 0.17 percent to $1,294.52 per ounce by 8:15 a.m. ET. In the previous session, it slid to $1,281.76, its lowest since Dec. 27. U.S. gold futures for June delivery rose 0.21 percent to $1,293.60 per ounce.