Friday August 30th

30-08-2019

Dow futures up more than 150 points, reversing earlier losses

U.S. stock index futures were higher Friday as the world’s two largest economies showed a willingness to resolve their long-running trade dispute. At around 7 a.m. ET, Dow Jones Industrial Average futures rose 168 points, indicating a positive open of more than 189 points. Futures on the S&P 500 and Nasdaq 100 were both higher, reversing earlier losses. Market focus is largely attuned to global trade developments, after President Donald Trump said that some trade discussions had taken place on Thursday, with more scheduled over the coming weeks. China’s commerce ministry said Thursday it was willing to calmly resolve the long-running trade dispute, but added it was against any further escalation in tensions. The comments spurred hopes for progress in talks. Trade tensions have dominated market sentiment for much of this year, with wild swings in global markets as rhetoric between world’s two largest economies fluctuates from conciliatory to combative. The back and forth between China and the U.S. on the trade front has led to a volatile month on Wall Street. Entering Friday’s session — the last one for August — the Dow and S&P 500 were both down nearly 2% while the Nasdaq Composite had lost around 2.5%. The Cboe Volatility Index (VIX), widely considered to be the best fear gauge on Wall Street, traded as high as 24.81 in August before pulling back to around 17. Investors also loaded up on traditionally safer assets such as gold and silver this month. The SPDR Gold Trust (GLD) is up more than 8% in August while the iShares Silver Trust (SLV) has surged 12.2%. At the same time, economic data has also pointed to a global growth slowdown, ramping up concerns of a possible recession. On the data front, personal income figures for July will be released at around 8:30 a.m. ET. U.S. consumer spending increased solidly in July as households bought a range of goods and services, which could further allay financial market fears of a recession, but the pace of growth in consumption is unlikely to be sustained amid tepid income gains. The Commerce Department said on Friday consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6% last month after an unrevised 0.3% gain in June. Economists polled by Reuters had forecast consumer spending advancing 0.5% last month. Chicago PMI (Purchasing Managers’ Index) and consumer sentiment data for August will follow slightly later in the session. Stocks in Asia were mixed on Friday as Beijing hinted that it will not retaliate against the latest round of tariffs from Washington for now. In Japan, the Nikkei 225 rose 1.19% to close at 20,704.37. The Topix index also added 1.46% to end its trading day at 1,511.86. Similar gains were seen in South Korea, where the Kospi finished the session 1.78% higher at 1,967.79. Mainland Chinese shares, on the other hand, slipped on the day. The Shanghai composite was down 0.16% to about 2,886.24 and the Shenzhen component shedding 0.35% to 9,365.68. The Shenzhen composite fell 0.744% to approximately 1,579.25. Hong Kong’s Hang Seng index was fractionally higher, as of its final hour of trading. Oil prices gave back some of their recent gains on Friday, but were still headed for the biggest weekly increase since early July, boosted by an easing of China-U.S. trade rhetoric, a decline in U.S stockpiles and a looming hurricane in Florida. Brent crude was down 28 cents, or 0.46%, at $60.80 a barrel, but was heading for a gain of more than 2% for the week. U.S. West Texas Intermediate (WTI) crude futures fell 77 cents, or 1.36%, to $55.94 a barrel. The contract is set for a gain of over 3% this week. Gold eased on Friday as equity markets and the dollar firmed, but fears of a global economic slowdown and uncertainty about the U.S.-China trade war kept the safe-haven metal on track for its fourth straight monthly rise. Spot gold was down 0.1% to $1,525.97 per ounce. However, bullion has gained nearly 8% so this month, heading for a fourth consecutive monthly gain. U.S. gold futures were down 0.1% at $1,535.20 an ounce.