Tuesday November 12th


US stock futures edge higher as investors await Trump trade speech

U.S. stock index futures were slightly higher on Tuesday as investors awaited a speech from President Donald Trump on trade and economic policy. Around 7 a.m. ET, Dow Jones Industrial Average futures were up 10 points, indicating a gain of just 11 points at the open. S&P 500 and Nasdaq 100 futures also pointed to marginal gains. Trump will be speaking at the Economic Club of New York later in the day where he could give clues to the status of trade talks between the U.S. and China. His speech comes amid some concerns regarding plans to sign a trade deal in the coming weeks. President Donald Trump said Friday that he had not agreed to scrap tariffs on Chinese goods after reports earlier last week said both sides had agreed to cancel existing tariffs in phases. Last month, Trump said China and the U.S. agreed to a phase one trade deal to be signed later in November. Recent optimism around U.S.-China trade helped stocks reach record highs. The Dow and S&P 500 are both up more than 3% over the past month while the Nasdaq has risen 5.8% in that time. But Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, thinks a lot of the positive news around a phase one deal have been baked in. “The stocks most exposed to the China trade war are back to prior peaks – and pre-trade war/1Q18 levels – in terms of both performance and valuation,” Calvasina said in a note. “With [earnings] reporting season winding down, a positive outcome on a China trade deal baked in, 2020 forecasts still in need of downward adjustment, and companies making it clear that 2020 guidance isn’t going to come anytime soon, positive catalysts between now and year-end are difficult to imagine.” The Dow eked out a record close as Boeing shares jumped, but the S&P 500 snapped a three-day winning streak. Major stocks markets in Asia closed higher on Tuesday after struggling for direction earlier in the day. Concerns over the state of U.S.-China trade negotiations as well as a recent escalation of violence in protests in Hong Kong continued to loom over regional markets. Japan’s Nikkei 225 gained 0.81% on the day to 23,520.01 while the Topix index recovered from an earlier decline to close at 1,709.67. Mainland Chinese shares were mixed on Tuesday. The Shanghai composite added 0.17% to around 2,914.82 while the Shenzhen composite gained 0.17% to approximately 1,614.19. The Shenzhen component, on the other hand, declined by 0.11% to 9,670.14. Meanwhile, market movements in Hong Kong continued to be monitored. The Hang Seng index rose 0.41%, as of its final hour of trading. The moves came after the Hang Seng index plunged more than 2.5% on Monday following an escalation in violence amid unrest in the embattled city. A protester was left in critical condition after being shot by police Monday morning local time. Separately, another man was also in critical condition after he was doused with what police described as “flammable liquid” and set on fire. The Kospi in South Korea added 0.79% to close at 2,140.92. Oil rose further above $62 a barrel on Tuesday, supported by hopes that U.S. President Donald Trump may signal progress on trade talks with China and lower inventories at a U.S. oil hub. Concern about slower economic growth and oil demand due to the fallout from the 16-month U.S.-China trade dispute sent prices lower on Monday. Trump gives a speech later on Tuesday and investors are keen for an update on the talks. Brent crude, the global benchmark, was up 27 cents at $62.44 a barrel, after falling as low as $61.90. West Texas Intermediate (WTI) crude was up 22 cents at $57.08. Gold prices eased on Tuesday as expectations of positive trade talks between the United States and China bolstered risk appetite, while investors booked profits. Spot gold slipped 0.2% to $1,453.46 per ounce, extending declines into a fourth straight session. U.S. gold futures also dropped 0.2%, to $1,454.20 per ounce.