Wednesday October 9th

9-10-2019

Dow futures jump 200 points on a report China is open to a partial US trade deal

U.S. stock index futures jumped Wednesday morning on a report that said China is open to agreeing to a partial trade deal with the U.S. Around 6:50 a.m. ET, Dow Jones Industrial Average futures indicated a gain of 211 points at the open. S&P 500 and Nasdaq 100 futures also  pointed to solid gains. Bloomberg News reported, citing an official, China is prepared to accept a partial trade deal as long as no more tariffs are imposed by President Donald Trump. The report added that Beijing would offer non-core concessions like purchases of agricultural products in return, but not budge on major sticking points between the two nations. The unnamed official said, however, negotiators were not optimistic about securing a broad agreement that would fully end the trade conflict between the world’s two largest economies. Both sides are set for high-level trade negotiations in Washington on Thursday.  Separately, the Financial Times reported that officials in China are offering to increase purchases of U.S. agricultural products, in order to reach a partial deal. The world’s two largest economies have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment. The long-running dispute has slowly expanded beyond trade policy, exacerbating fears about further damage to a fragile global economy. Stocks fell sharply on Tuesday as expectations for progress on the trade talks dimmed. The Dow lost more than 300 points while the S&P 500 and Nasdaq dropped more than 1% each. Those expectations lowered amid U.S. visa restrictions on Chinese officials and the addition of more Chinese companies to a U.S. trade blacklist this week. On the data front, and wholesale trade figures for August and Job Openings and Labor Turnover Survey (JOLTS) data for August will both be released at around 10 a.m. ET. Stocks in Asia were mixed on Wednesday amid growing uncertainty over the high-level trade negotiations between the U.S. and China due to commence later this week. Mainland Chinese stocks recovered from an earlier slip to rise on the day, with the Shanghai composite up 0.39% to around 2,924.86 and Shenzhen component adding 0.34% to 9,506.56. The Shenzhen composite gained 0.654% to approximately 1,609.10. Hong Kong’s Hang Seng index shed 0.61%, as of its final hour of trading. Elsewhere, the Nikkei 225 in Japan slipped 0.61% on the day to 21,456.38 while the Topix index shed 0.3% to close at 1,581.70. Markets in South Korea were closed on Wednesday for a holiday. Oil rose on Wednesday following media reports that China was open to agreeing a partial trade deal with the United States, while unrest in OPEC members Iraq and Ecuador also supported prices. Brent crude was up 72 cents at $58.96 a barrel, and U.S. West Texas Intermediate crude was at $53.29, up 67 cents. Both gained more than 1%. Gold held steady on Wednesday on uncertainty over U.S.-China trade talks and Britain’s exit from the European Union, ahead of minutes from the U.S. Federal Reserve’s September meeting, which could shed light on future interest rate cuts. Spot gold eased 0.2% to $1,502.82 per ounce as of 0932 GMT, and held above the key $1,500 level after rising as much as 1% in the previous session. U.S. gold futures gained 0.3% to $1,508.10 per ounce.