Wednesday April 3rd

3-04-2019

US stock futures rise on hopes the US and China are close to a trade deal

U.S. stock index futures rose Wednesday on optimism over U.S.-China trade talks. As of 8:20 a.m. ET, Dow Jones Industrial Average futures indicated a gain of 92 points at the open. S&P 500 and Nasdaq futures also rose. American and Chinese officials are reportedly closing in on a trade deal, having resolved most of the outstanding issues in their protracted trade dispute. Both countries have levied tariffs on billions of dollars' worth of each other's goods since last year. According to the Financial Times, Beijing wants Washington to remove existing U.S. duties on Chinese imports, while the Trumpadministration wants China to agree to enforcement measures that ensure the country sticks to the deal. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are scheduled to meet with Chinese Vice Premier Liu He later on Wednesday to resume talks. The news appeared to support global equities as well as U.S. futures, with both European and Asian markets climbing Wednesday. This comes after a rocky previous session for Wall Street. The Dow fell for the first time in four sessions Tuesday, pulling back from a solid rally at the start of the week. Gains were capped, however, by weaker-than-expected employment data. Private payrolls increased by 129.000 in March, according to ADP and Moody's Analytics. That is well below a Refinitiv estimate of 173,000. A bearish call on Caterpillar shares also kept the market in check. Caterpillar shares fell 0.6 percent after Deutsche Bank downgraded the industrial giant to hold from buy and slashed its 12-month price target. The bank cited a "collapse" in synchronized global growth. Major Asian stock markets closed higher on Wednesday following a report that said the U.S. and China are closer to reaching a trade agreement. Mainland Chinese stocks closed higher as they bounced from a tepid morning session, with the Shanghai composite adding 1.24 percent to 3,216.30 and the Shenzhen component gaining about 0.78 percent to 10,340.51. The Shenzhen composite advanced 0.824 percent to 1,772.09. Hong Kong's Hang Seng index gained 1.19 percent, as of its final hour of trading. Elsewhere in Asia, the Nikkei 225 in Japan added 0.97 percent to close at 21,713.21. The Topix index rose 0.63 percent. Over in South Korea, the Kospi gained 1.2 percent to finish at 2,203.27. Oil prices rose for a fourth day on Wednesday, pushing Brent towards a nearly five-month high of $70 a barrel as support from OPEC-led supply cuts and U.S. sanctions overshadowed a report showing an unexpected rise in U.S. inventories. Brent futures gained 38 cents, or 0.55 percent, to $69.75 by 0900 GMT. They earlier reached $69.96 - the highest since Nov. 12, when they last traded above $70. U.S. West Texas Intermediate crude rose 20 cents or 0.32 percent to $62.78, having hit $62.99, the highest since Nov. 7. "The psychologically important $70 a barrel threshold has proved a tough nut to crack for the Brent benchmark over the past few weeks," PVM oil broker Stephen Brennock said. Gold prices edged lower on Wednesday as safe-haven demand for the metal was hurt by a risk-conducive environment with equities rallying to seven-month highs, while a weaker dollar limited bullion's losses. Spot gold edged 0.2 percent lower to $1,290.81 per ounce as of 0742 GMT, having touched its lowest level since March 7 at $1,284.76 in the previous session. U.S. gold futures were flat at $1,295.50 an ounce.