Wednesday November 28th

28-11-2018

Dow set to climb 160 points ahead of Fed Chair Powell's speech

U.S. stock index posted solid gains ahead of Wednesday's open as investors awaited a key speech from the top Federal Reserve official. Around 7 a.m. ET, Dow Jones Industrial Average futures climbed 160 points, indicating a gain of 161.27 points at the open. Futures on the S&P 500 and Nasdaq 100 futures also signaled a positive start to the session. Fed Chair Jerome Powell is expected to speak at the Economic Club of New York. During the event, Powell is slated to talk about the Fed's framework for monitoring financial stability. Investors are eagerly awaiting the speech as stocks have fallen in part because of fears the central bank may be tightening monetary policy too quickly. Ahead of the event, Trump told the Washington Post that he wasn't "even a little bit happy" with his appointment of Powell as the Fed's Chair, adding that he thought the central bank's recent actions were "way off-base". Futures also rose as beaten-down technology stocks rose in the premarket. Amazon, Apple and Netflix all rose about 1 percent before the bell, while Alphabet gained half a percent. Wednesday's moves come after equities closed higher in the previous session, as concerns surrounding trade showed signs of easing. The subject itself has been of key importance this week as an important G-20 summit nears, at which both President Donald Trump and China's Xi Jinping will be present. On Monday, Trump told the Wall Street Journal that it was "highly unlikely" that the States would delay from increasing tariff levels to 25 percent on $200 billion of Chinese goods, which put some markets under pressure. The next day however, White House economic advisor Larry Kudlow appeared to alleviate concerns, stating that the Trump administration had resumed discussions "at all levels" with China's government. At the summit, the two leaders are expected to have dinner together. Further easing trade worries was a New York Times report that said Trump was worried about the impact of a long trade war with China on markets and the economy. This could lead Trump to seek a compromise with China on trade, the Times said, citing U.S. officials. On the data front, a torrid U.S. economy blazed a 3.5% pace of growth during the summer and boosted corporate profits to the highest rate in six years, fresh government figures show. The increase in gross domestic product — the official measuring stick of the economy — was unchanged from the original finding. Economists polled by MarketWatch had forecast third-quarter GDP to be revised up to 3.6% annual rate. Salesforce shares rose more than 8 percent in the premarket after the company reported better-than-expected earnings. Asia markets were mostly higher on Wednesday after a cautious start as investors wait for an important meeting between U.S. President Donald Trump and Chinese leader Xi Jinping later this week. The mainland Chinese markets ended the day higher by more than 1 percent each. The Shanghai composite rose 1.05 percent to 2,601.73 while the Shenzhen composite advanced 1.399 percent to 1,355.38. Hong Kong's Hang Seng index gained 1.22 percent in late-afternoon trade. Elsewhere in Asia, most markets gained. Japan's Nikkei 225 was up 1.02 percent at 22,177.02 while the Topix index rose 0.58 percent to 1,653.66. Oil rose further above $60 a barrel on Wednesday, supported by expectations that OPEC and its partners will next week decide to curb supply and helped by a drop in North Sea output. The Organization of the Petroleum Exporting Countries plus Russia and other allies meet on Dec. 6-7. Producers are discussing a supply curb of 1 to 1.4 million barrels per day and possibly more, OPEC delegates have told Reuters. Brent crude, the global benchmark, was up 53 cents at $60.74 a barrel at 0919 GMT and traded as high as $61.27. U.S. crude added 41 cents to $51.97. Gold hovered near a two-week low on Wednesday as the dollar remained buoyant ahead of a speech by U.S. Federal Reserve Chair Jerome Powell that is expected to offer clues on the central bank's monetary policy. Spot gold was down 0.1 percent at $1,213.62 per ounce at 1103 GMT, having dipped to its lowest level since Nov. 15 at $1,211.36 in the previous session. U.S. gold futures were flat at $1,213.20.