Monday December 23rd

23-12-2019

Stocks are set to kick off the holiday week with more gains as futures rise

U.S. stock index futures signaled a higher open on Monday after China said it will cut import tariffs on a wide range of goods. Futures on the Dow Jones Industrial Average were trading about 60 points higher and indicated a positive open of more than 40 points. Futures on the S&P 500 and Nasdaq were also higher. China’s finance ministry said Sunday starting January 1, it will lower import tariffs on over 850 products ranging from frozen pork and avocado to some types of semiconductors. The country is making efforts to boost imports amid a slowing economy and a trade war with the U.S. Wall Street posted fresh record highs on Friday as stocks continued to rally on the back of an easing of geopolitical risks. The S&P 500 was up more than 1.5% last week and posted its fourth consecutive weekly gain. The benchmark is up 28.5% for 2019 through Friday. “Stocks are grinding relentlessly higher into year-end on continued momentum from the positive resolution of four key events: A phase one trade deal, a dovish Fed, economic data that isn’t getting worse and Brexit resolution,” Tom Essaye, founder of Sevens Report, said in a note on Monday. The U.S. stock market closes at 1 p.m. ET on Tuesday for Christmas Eve and is closed on Wednesday for Christmas. Thursday and Friday are regular trading days. President Donald Trump tweeted on Friday that he had held a “very good talk” with Chinese President Xi Jinping about the recently agreed phase one trade deal, further boosting investor sentiment going into the holiday season. This time of year tends to be beneficial for investors as the so-called Santa Claus rally has historically given the stock market a short boost. During the final five trading days of the year and the first two tradings days of the new year, the S&P 500 has posted a 1.3% gain on average since 1950, according to the Stock Trader’s Almanac. Meanwhile, British media reported Sunday that Trump has invited U.K. Prime Minister Boris Johnson to visit the White House in the new year, amid hopes of a transatlantic trade deal following Britain’s departure from the European Union on January 31. On the data front, November’s National Activity Index figures are due out of the U.S. at 8:30 a.m. ET. There are no corporate earnings expected Monday. Major markets in Asia were subdued in Monday trade even amid greater optimism for U.S.-China relations. Mainland Chinese stocks tumbled. The Shanghai composite fell 1.40% to close at 2,962.75, while the Shenzhen composite dropped 1.92% to 1,667.71. The Shenzhen component was down 1.69% to 10,056.21 Hong Kong’s Hang Seng index was flat in its final hour of trade. Japan’s Nikkei 225 was flat, closing at 23,821.11, and the Topix index fell 0.21% to 1,729.42. South Korea’s Kospi closed flat to 2,203.71. Oil were little changed on Monday after Russia said an OPEC-led pact may consider easing output cuts next year but prices held near recent three-month highs on hopes for a trade deal between the United States and China. Brent crude was up 3 cents to $66.17 per barrel. West Texas Intermediate shed 3 cents to trade at $60.40 per barrel. Gold prices held steady on Monday in thin trading, as investors refrained from making big bets ahead of the Christmas and New Year holidays while waiting for fresh developments on the Sino-U.S. trade front. Spot gold was up 0.1% at $1,479.05 per ounce by 0106 GMT. U.S. gold futures rose 0.1% to $1,482.90 per ounce.