Friday October 11th

11-10-2019

Dow set to surge more than 300 points as expectations of limited US-China trade deal increase

U.S. stock index futures were solidly higher Friday as traders grew more optimistic over the possibility of a limited trade deal between China and the U.S. Around 7:30 a.m. ET, Dow Jones Industrial Average futures were up 280 points, indicating a gain of 314 points at the open. Futures on the S&P 500 and Nasdaq 100 also rose sharply. The gains would snap a three-week losing streak for the Dow and S&P 500. Big tech shares such as Facebook, Amazon, Apple, Netflix and Google-parent Alphabet all gained more than 1% in the premarket. Bank stocks also gained steam as Bank of America and J.P. Morgan Chase rose more than 1% each. Chipmakers rose broadly. Micron Technology gained more than 2% before the bell while Skyworks Solutions advanced 1.9%. President Donald Trump told reporters on Thursday that talks between the two countries were going “really well.” His comments came after he tweeted that he would meet with Chinese Vice Premier Liu He at the White House on Friday. The meeting is scheduled to take place at 2:45 p.m. ET. Trump’s comments were followed by China’s securities regulator announcing a timetable to remove a requirement that foreign financial companies must have a Chinese investor. Meanwhile, a White House official told Reuters that Thursday’s talks went well, “probably better than expected.” The New York Times also reported the two sides could announce a deal that would avoid raising tariffs on Chinese goods. “Even a partial deal could be a huge boost for stocks, especially following this week’s scary headlines,” Ken Berman, founder of Gorilla Trades, said in a note. “The Chinese delegation is scheduled to leave Washington tomorrow, so another day of volatile swings might be ahead.” The U.S.-China trade war has dragged on for more than a year. In that time, the U.S. has targeted billions of dollars worth of Chinese goods with tariffs. China has retaliated with levies of its own, sparking fears of slower global economic growth and weaker corporate earnings. U.S. import prices rose modestly in September and were lower for goods excluding oil, suggesting that imported inflation could remain subdued. The Labor Department said on Friday import prices increased 0.2% last month. Economists polled by Reuters had forecast import prices would be unchanged during the month. Stocks in Asia were higher on Friday as investors cheered positive developments on the U.S.-China trade front. Mainland Chinese stocks rose on the day, with the Shanghai composite up 0.88% to around 2,973.66 and the Shenzhen composite 0.314% higher to approximately 1,636.96. The Shenzhen component also rose 0.3% to 9,666.58. Hong Kong’s Hang Seng index jumped 2.32%, as of its final hour of trading. The Nikkei 225 in Japan rose 1.15% on the day to 21,798.87 while the Topix index added 0.88% to close at 1,595.27. In South Korea, the Kospi advanced 0.81% to end its trading day at 2,044.61. Oil prices rose sharply on Friday morning after Iranian state media said that two rockets had struck an Iranian tanker traveling through the Red Sea. Brent crude futures were up 2.07% at $60.33 a barrel by 8:00 a.m. London time, shortly after the news, with West Texas Intermediate (WTI) futures showing similar gains. Gold prices climbed on Friday, settling into a narrow range, as investors awaited more clarity on global uncertainties including trade and Brexit, helping the metal shake off initial declines driven by hopes for a breakthrough in the U.S.-China talks. Spot gold inched 0.3% higher to $1,499.15 per ounce, but slipped about 0.3% in the week. U.S. gold futures rose 0.1% to $1,502.30.