Thursday January 16th

16-01-2020

Dow futures rise more than 100 points, putting it on track to open at record high

U.S. stock index futures rose on Thursday as investors digested a key trade agreement between China and the U.S. as the corporate earnings season rolls on. Around 7 a.m. ET, Dow Jones Industrial Average futures were up 82 points, indicating a gain of 117 points at the open. S&P 500 and Nasdaq 100 futures also pointed to strong gains at the open. The gains in futures put the major averages on track to hit fresh record highs. President Donald Trump and Chinese Vice Premier Liu He signed a “phase one” trade deal in Washington on Wednesday. Under the agreement, China is set to buy an additional $200 billion in U.S. goods over the next two years. As a result of the deal, U.S. exports to China should in theory rise to $263 billion in 2020 and $309 billion in 2021, CNBC reported. Both figures would represent a record-breaking acceleration of U.S. exports to China. That said, China’s other suppliers of agricultural commodities will not be impacted by the Sino-U.S. trade deal since buying will be based on market principles, Vice Premier Liu He said, according to a report from state-owned CCTV on Thursday. Despite the signing, some analysts believe additional tariffs could still be imposed and that trade uncertainty could pop up somewhere else, including in Europe. Elsewhere, investors are also monitoring corporate earnings with Morgan Stanley, Charles Schwab, and CSX due to report Thursday. The data calendar is quite crowded with weekly jobless claims, monthly retail sales and import prices, and the Philadelphia Fed manufacturing numbers due at 8:30 a.m. ET. Business inventories data and a National Association of Home Builders survey are also expected at 10 a.m. ET. Asia markets traded mixed on Thursday after the United States and China ended some uncertainties for the world economy by signing a partial trade agreement. Japan’s Nikkei 225 rose fractionally to 23,933.13 while the Topix index was a touch lower at 1,728.72. In South Korea, the Kospi index picked up a gain of 0.77% to 2,248.05. Hong Kong’s Hang Seng index added 0.11% in late afternoon trade, but the Chinese mainland markets struggled to climb. The Shanghai composite declined 0.52% to 3,074.08 while the Shenzhen composite fell 0.15% to 1,811.56 and the Shenzhen component ended near flat. After early optimism around the United States and China Phase 1 trade deal signing lifted oil, prices turned negative as the International Energy Agency said it expected oil production to outstrip demand. Brent fell 7 cents to trade at $63.93 per barrel, while U.S. West Texas Intermediate crude shed 22 cents, or 0.4%, to trade at $57.62 per barrel. Gold prices edged lower on Thursday, as optimism over a preliminary trade deal between the United States and China increased risk appetite, although concerns about tariffs and unresolved core issues remained. Among other precious metals, palladium scaled a record high, while platinum jumped to its highest in nearly two years. Spot gold fell 0.2% to $1,552.69 per ounce by 0752 GMT. U.S. gold futures eased 0.1% to $1,553.10.