Wednesday January 9th


Dow set to rise nearly 100 points on US-China trade optimism

U.S. stock index futures rose slightly on Wednesday following news that the U.S. and China had concluded mid-level trade talks. As of 8:13 a.m. ET, Dow Jones Industrial Average futures climbed 117 points, indicating a higher open of 95.55 points; S&P 500and Nasdaq 100 futures were also higher. Shares of Boeing rose 0.8 percent in the premarket. Discussions between Washington and Beijing over trade concluded, the Chinese foreign ministry said Wednesday. Both countries have been engaged in a tense sparring of tariffs, targeting billions of dollars’ worth of imports in each other’s economies with levies. Traders are hopeful of a resolution to the U.S.-China trade war, and are eagerly watching for any signs of a potential deal. U.S. Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney said earlier on Wednesday that he thought negotiations “went just fine.” The Dow notched its first three-day winning streak since late November on Tuesday. Investors had been on edge in previous weeks, fleeing to less risky assets as fears of a potential slowdown in global economic growth took hold. Wall Street appeared to follow the positive sentiment seen in Europe and Asia on Wednesday. Indexes in both regions were mostly higher on the back of optimism surrounding trade talks. Investor focus will also likely be attuned to political developments, as the U.S. government shutdown showed no signs of letting up. President Donald Trump delivered an address on immigration and border security Tuesday night, where he made his case for the proposed wall along the U.S.-Mexico border, a key sticking point inhibiting progress toward a funding deal to re-open the government. Traders are likely to monitor talks from several Federal Reservepolicymakers Wednesday: Atlanta Fed President Raphael Bostic speaks at an event in Chattanooga, Tennessee, at 8:20 a.m. ET; Chicago Fed President Charles Evans is speaking at an event in Riverwoods, Illinois, at 9 a.m. ET; and Boston Fed President Eric Rosengren will provide an economic outlook at an event in Boston, Massachusetts, at 11:30 a.m. ET. Fed Chairman Jerome Powell assuaged investor concerns last week, saying at a panel discussion that the U.S. central bank “will be patient” with monetary policy. Investors, increasingly on edge over the possibility of a slowdown in global growth, had feared the institution may be hiking interest rates too fervently. The Fed hiked rates four times last year, and expectations have tempered as to how many times it may raise its benchmark rate in 2019. Asia markets saw gains on Wednesday as investors remained cautiously optimistic about trade negotiations between the U.S. and China, which wrapped up on Wednesday after three days. Japan’s Nikkei 225 advanced 1.1 percent to close at 20,427.06 while the Topix also gained 1.1 percent to finish its trading day at 1,535.11, with almost all sectors rising. South Korea’s Kospi gained nearly 2 percent to close at 2,064.71. The mainland Chinese markets also saw gains on Wednesday, with the Shanghai composite rising around 0.71 percent to close at about 2,544.34 while the Shenzhen composite advanced 0.543 percent to finish its trading day at approximately 1,306.95. The Shenzhen component also climbed up by 0.761 percent to close at 7,447.93. Meanwhile, Hong Kong’s Hang Seng index jumped more than 2.1 percent, as of its final hour of trade. Oil prices rose 2 percent on Wednesday as the extension of U.S.-China talks in Beijing raised hopes that the world’s two largest economies would resolve their trade standoff. U.S. West Texas Intermediate (WTI) crude oil futures were at $50.82 per barrel at 0945 GMT, up $1.04, or 2.09 percent, the first time this year that WTI has topped $50. International Brent crude futures were up $1.09, or 1.86 percent, at $59.81 per barrel. Both crude price benchmarks added to Tuesday’s 2 percent gains and have now been on the rise for eight straight days - their longest rally since June 2017. Gold slipped for a second session on Wednesday as investors regained appetite for risk on hopes of a breakthrough in U.S.-Chinese trade talks, while palladium hit a record high. Spot gold was down 0.3 percent at $1,281.01 per ounce as of 7:38 a.m. ET. U.S. gold futures also shed 0.32 percent to $1,281.80 per ounce.