Wednesday February 13th

13-02-2019

Stock futures rise on US-China trade optimism

U.S. stock index futures rose on Wednesday, with market participants hopeful that Chinese and U.S. trade authorities will reach an agreement. At around 7:25 a.m. ET, Dow Jones Industrial Average futures were up 80 points, indicating a gain of 84 points at the open. Futures on the S&P 500 and Nasdaq 100 were also seen higher. Investors continue to follow news out of U.S.-China trade talks. President Donald Trump suggested Tuesday that he might be open to postpone the current deadline of early March so that both sides can reach a deal. On Wednesday, The South China Morning Post reported that Chinese President Xi Jinping will meet with U.S. delegates on Friday as both sides try to strike a deal. Failure to achieve an agreement would spark higher U.S. tariffs on Chinese goods. The positive sentiment in equity markets is also linked to tentative deal on border security funding, which could prevent another government shutdown. President Trump said Tuesday he is not happy with this proposal but added he will be studying its details. Wednesday's gains add to a sharp rally seen in the previous session. The Dow surged more than 350 points while the S&P 500 and Nasdaq Composite both climbed more than 1 percent. The S&P 500 also closed above its 200-day moving average — a key technical level watched by traders — for the first time since Dec. 3. On the data front, U.S. consumer prices were unchanged for a third straight month in January, leading to the smallest annual increase in inflation in more than 1½ years, which could allow the Federal Reserve to hold interest rates steady for a while. The Labor Department said on Wednesday its Consumer Price Index last month was held down by cheaper gasoline, which offset increases in the cost of food and rents. In the 12 months through January, the CPI rose 1.6 percent, the smallest gain since June 2017. The CPI increased 1.9 percent on a year-on-year basis in December. The monthly federal budget will be out at 2 p.m. ET time. Major stock markets in Asia closed higher on Wednesday amid positive sentiment on the U.S.-China trade front. The mainland Chinese markets were higher on the day. The Shenzhen component rose 2.012 percent to close at 8,171.21 and the Shenzhen composite gained 1.872 percent to finish its trading day at 1,389.68. The Shanghai composite recovered from earlier losses to close 1.84 percent higher at 2,721.07. Meanwhile, Hong Kong's Hang Seng index gained more than 1 percent, in its final hour of trading. Japan's Nikkei 225 extended gains from the previous session, rising 1.34 percent to close at 21,144.48 while the Topix index advanced 1.06 percent to finish at 1,589.33. South Korea's Kospi also gained 0.5 percent to close at 2,201.48. Oil prices rose on Wednesday, after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production. Meanwhile U.S. futures gained on a reported decline in domestic oil inventories, though gains were capped by expectations that rising supply will swamp demand growth this year. Brent crude futures rose 55 cents to $62.97 a barrel around 8:25 a.m. ET (1325 GMT). U.S. crude oil futures gained 31cents to trade at $53.41 a barrel. Gold steadied on Wednesday as the dollar slipped from a two-month peak on hopes of a trade deal between the United States and China, with the metal's gains capped by rising global stock markets. Spot gold was up 0.01 percent at $1,310.65 per ounce, as of 8:40 a.m. ET, while U.S. gold futures fell 0.02 percent to $1,313.80 an ounce.