Thursday September 20th

20-09-2018

Dow set to open 100 points higher as trade fears simmer down

U.S. stock-index futures rose on Thursday as fears of a full-blown trade war appeared to decrease. Around 7:50 a.m. ET, Dow Jones Industrial Average futures rose 80 points, indicating a gain of 100.24 points at the open. S&P 500 and Nasdaq 100 futures also pointed to strong gains at the open. As tensions between the two largest economies in the world slap tariffs on each other's goods, the Chinese commerce ministry said Thursday the country hopes the U.S. will take steps to correct its behavior. The comments come after the U.S. administration announced Monday it would inflict 10 percent tariffs on $200 billion worth of Chinese imports, which would rise to 25 percent by year-end. China retaliated Tuesday by announcing levies targeting over 5,000 American products worth $60 billion and to go into effect next week. The country has also filed a complaint with the World Trade Organization about the U.S.' latest round of duties. However, the levies imposed by both countries were seen as less than previously feared, helping lift sentiment on Wall Street. The Dow is up more than 1 percent over the past two days. The S&P 500, meanwhile, has risen more than 0.6 percent in that time period. J.P. Morgan Chase CEO Jamie Dimon also played down the conflict between the U.S. and China, calling it a skirmish and not a trade war. General Electric shares fell 2 percent after an analyst at J.P. Morgan slashed his price target on the company to $10 from $11. The analyst noted he expects "weaker results at power and some franchise value impact." Asia markets mixed as investors react to heightened US-China trade tensions. Japan' Nikkei 225 closed near flat at 23,674.93 while the Topixindex added 1.94 points, or 0.11 percent, to 1,787.6. In South Korea, the Kospi gained 14.99 points, or 0.65 percent, to 2,323.45. Chinese mainland markets finished slightly lower. The Shanghai composite fell 0.06 percent to 2,729.25 and the Shenzhen composite declined 3.2 points, or 0.23 percent, to 1,420. Hong Kong's Hang Seng index gained 0.26 percent to 27,477.67. Oil rose for a third day on Thursday amid another drawdown in U.S. inventories and strong U.S. gasoline demand, while signs OPEC may not raise output to address shrinking supplies from Iran also supported prices. Global benchmark Brent crude was up by 26 cents, or 0.3 percent, at $79.66 by 0611 GMT, after gaining half-a-percent on Wednesday. U.S. West Texas Intermediate crude was up 60 cents, or 0.8 percent, at $71.72 a barrel, after rising nearly 2 percent the previous session. Gold steadied on Thursday as the dollar slumped, its safe-haven appeal lessened by fading fears over Sino-U.S. trade tensions and as investors opted for assets perceived as more risky, like stocks. Spot gold was flat at $1203.18, after rising 0.5 percent in the previous session. U.S. gold futures were flat at $1,202 an ounce.