Wednesday January 15th

15-01-2020

US stock futures are flat ahead of US-China deal signing

U.S. stock index futures were little changed Wednesday morning as investors awaited the signing of the U.S.-China “Phase One” trade deal. Around 7:10 a.m. ET, Dow Jones Industrial Average futures indicated a gain of just 12 points at the open. S&P 500 and Nasdaq 100 futures also pointed to marginal gains to start off the session. Investors have been eagerly awaiting the signing of the so-called phase one trade agreement as the conflict between the world’s largest economies has dragged on for nearly two years. However, Treasury Secretary Steven Mnuchin said that tariffs on Chinese goods would remain in place until both countries reach an enforceable “phase two” agreement, according to Reuters. There’s also concern over the details of the phase one agreement. A U.S. Trade Representative document said the deal includes a “dramatic expansion of U.S. food, agriculture and seafood product exports.” The USTR has also said China will buy at least $200 billion in U.S. products over the a two-year period. Still, if the deal is smaller than what the market expected, it could pressure risk assets such as stocks. Wall Street also kept an eye on Corporate America as the earnings season. Bank of America reported quarterly results that beat analyst expectations as bond-trading revenue ripped higher. Goldman Sachs posted a revenue for the quarter that surpassed estimates. So far, about 30 S&P 500 companies have released their quarterly numbers. Of those companies, 82% have posted better-than-expected profits, according to FactSet data. On the data calendar, the New York Empire State Fed survey will be released at 8:30 a.m. ET, along with December producer price index figures. Market sentiment dragged in Asia on Wednesday ahead of the U.S. and China signing a phase one trade deal. The Nikkei 225 in Japan fell 0.45% to 23,916.58 while the Topix index was down 0.54% at 1,731.06. In South Korea, the Kospi index slipped 0.35% to 2,230.98. Hong Kong’s Hang Seng index fell 0.52% in its final hour of trade. Chinese mainland shares were also lower: The Shanghai composite declined 0.54% to close at 3,090.04, the Shenzhen component was down 0.22% to 1,814.21 and the Shenzhen component fell 0.15% to 10,972.32. Oil prices moved between gains and losses as traders eyed the Phase 1 trade deal between the United States and China, the world’s biggest oil users, and whether it would boost demand as the United States intends to keep tariffs on Chinese goods until a second phase. Brent crude fell 4 cents to trade at $64.45 per barrel, while U.S. West Texas Intermediate gained 2 cents to reach $58.25 per barrel. Gold prices on Wednesday rose from an over one-week low hit in the last session on renewed worries about the U.S.-China trade relations ahead of the signing of an initial deal. Spot gold rose 0.3% to $1,551.40 per ounce, having slipped to a more than one week low of $1,535.63 in the previous session. U.S. gold futures gained 0.5% to $1,552.20.