Monday January 7th

7-01-2019

Dow futures point to small gain as US-China trade talks resume

U.S. stock index futures were mostly flat on Monday, with market focus largely attuned to trade talks between Chinese officials and their American counterparts. At around 7:55 a.m. ET, Dow Jones Industrial Average futures rose 36 points, indicating a gain of 24.84 points at the open. Futures on the S&P 500 and Nasdaq 100 were little changed. Market participants are closely monitoring global trade developments, as the world’s two largest economies resume talks early this week. According to Reuters, the Chinese foreign ministry said Monday that China and the U.S. have expressed an eagerness to work together. The ministry also added China stands ready to resolve trade disputes with the U.S. on an equal footing. President Donald Trump said Sunday that weakness in the Chinese economy gave Beijing an extra incentive to work toward a resolution to the global trade war.  “I think China wants to get it resolved. Their economy’s not doing well,” Trump told reporters at the White House. The U.S. and China slapped a series of punitive tariffs on each other’s goods last year, sparking concerns over a global economic slowdown. The U.S. has already put tariffs on $250 billion in Chinese goods — and has threatened duties on double that value of products. Beijing has responded with tariffs on $110 billion in U.S. goods, specifically targeting politically important industries such as agriculture. The moves in premarket trade come after risk appetite received a significant boost on Friday, when U.S. payrolls showed 312,000 jobs were created in December. Economists surveyed by Dow Jones had been expecting job growth of just 176,000. Federal Reserve Chairman Jerome Powell also sought to ease market concerns of slowing growth in the world’s largest economy on Friday, saying the U.S. central bank would be “patient ” and flexible with monetary policy decisions this year. On the data front, ISM non-manufacturing figures for December are expected to be released at around 10:00 a.m. ET. On Friday, the Dow jumped more than 700 points amid better-than-expected economic news and easing fears of tighter monetary policy in the near term. Stocks in Asia gained on Monday as investor sentiment picked up slightly amid a new round of trade negotiations between the United States and China in Beijing. Japan’s Nikkei 225 bounced 2.44 percent to close at 20,038.97 while the Topix jumped 2.81 percent to finish its trading day at 1,512.53. South Korea’s Kospi gained 1.34 percent to close at 2,037.10. Hong Kong’s Hang Seng index also saw gains of around 0.6 percent in late afternoon trade. Mainland Chinese markets, which are closely watched in relation to Beijing’s trade war with Washington, also rose on the day. The Shanghai composite was up around 0.72 percent to close at about 2,533.09 while the Shenzhen composite jumped 1.713 percent to end its trading day at approximately 1,301.41. The Shenzhen component gained 1.584 percent to close at about 7,400.20. Oil prices rose by more than 1 percent on Monday, lifted by optimism that talks could soon resolve the trade war between the United States and China, while supply cuts by major producers also supported the market. Brent crude futures were at $57.75 per barrel at 0404 GMT, up 69 cents, or 1.2 percent, from their last close. U.S. West Texas Intermediate (WTI) crude oil futures were at $48.67 per barrel, up 71 cents, or 1.5 percent. Gold rose on Monday as the dollar fell on expectations that the U.S. Federal Reserve would halt its rate-hiking cycle for the year, lifting demand for the metal from holders of other currencies. Spot gold was up about 0.5 percent at $1,291.15 per ounce as of 7:23 a.m. ET. U.S. gold futures gained 0.53 percent to $1,292.60 per ounce.