Friday November 30th

30-11-2018

Stocks cut losses after Lighthizer says he expects Trump-Xi dinner 'success'

U.S. stock index futures pared most of their losses after U.S. Trade Representative Robert Lighthizer said he expects a key dinner between President Donald Trump and China's Xi Jinping to be a "success." Dow Jones Industrial Average futures traded 73 points lower at about 8:23 a.m. ET, indicating a decline of 23 points. S&P 500 and Nasdaq 100 futures pointed a flat open. Dow futures had fallen more than 100 points earlier in the day. Trade news has again become the dominant focus for investors as President Donald Trump and Chinese leader Xi Jinping get set to meet at the summit. China hawk Peter Navarro, Trump's trade advisor, will attend the dinner between the two, CNBC reported on Thursday, news that piled pressure on stocks on the day. Navarro is seen as a contentious figure in terms of Washington's trade relations with Beijing due to his aggressive stance on the world's second-largest economy. He clashed with White House economic advisor Larry Kudlow earlier this month after saying any deal with China would be "on President Donald J. Trump's terms, not Wall Street's terms." Market players also digested minutes from the Federal Reserve'sNovember 7-8 meeting, which showed the U.S. central bank was ready to hike interest rates again in December, but is worried about the impact trade uncertainty and corporate debt could have on economic growth. Some Fed members also raised the point that America's base interest rate "might currently be near its neutral level," echoing a recent dovish comment from Fed Chairman Jerome Powell, who said interest rates are "just below" neutral. A federal funds rate that would be neutral for the economy means one that is neither speeding up nor slowing down growth. No major earnings results are expected to be posted on Friday. In economic data, Chicago PMI (purchasing managers' index) and U.S. PMI manufacturing index figures are due to be released at 9:45 a.m. ET. Asia Pacific markets ended mixed on Friday as investors waited for a highly anticipated meeting between President Donald Trump and his Chinese counterpart Xi Jinping at the G-20 summit in Argentina, which many hope will help ease escalating trade tensions between the two countries. Japan's Nikkei 225 rose 88.46 points, or 0.4 percent, to 22,351.06, while the Topix index added 0.48 percent to 1,667.45. South Korea's Kospi fell 17.24 points, or 0.82 percent, to 2,096.86. The Bank of Korea raised its policy interest rate on Friday for the first time in a year, but the move was said to be widely expected. Greater China markets ended the day higher: The Shanghaicomposite gained 20.74 points, or 0.81 percent, to 2,588.18. The Shenzhen composite added 12.31 points, or 0.92 percent, to wind up at 1,337.74. Hong Kong's Hang Seng index was up 0.4 percent in late-afternoon trade. Oil prices steadied on Friday as expectations that OPEC and Russia would agree some form of production cut next week balanced pressure from swelling inventories. Both international oil benchmarks, North Sea Brent and U.S. light crude, have had their weakest month for more than 10 years in November, losing 28 percent and 30 percent respectively as global supply has outstripped demand. Brent was up 25 cents at $59.76 a barrel by 0910 GMT. U.S. West Texas Intermediate was unchanged at $51.45. Both contracts are up about 1 percent this week, the first weekly gains in almost two months. Gold prices held range-bound on Friday as the dollar trod water after U.S. President Donald Trump sent mixed signals about the prospects for a trade deal with Beijing, while palladium notched a record high. "Any positive development will be negative for the dollar index, which has benefited as a safe haven this year whenever tensions were seen escalating. On the contrary, if the trade spat intensifies, the stage will be set for further decline in gold prices." Spot gold was little changed at $1,223.99 per ounce at 0826 GMT. U.S. gold futures inched lower to $1,228.7 an ounce. The dollar index, which measures the greenback against a basket of six major currencies, was little changed on Friday.