Friday November 8th

8-11-2019

Dow futures point to slight gains at the open as stocks close out a big week

U.S. stock index futures pointed to a little changed open on Friday following a record-setting session for the major stock indexes. Around 7 a.m. ET, Dow Jones Industrial Average futures were unchanged but pointed to a gain of 33 points at the open. S&P 500 and Nasdaq 100 futures pointed to a flat open. The small implied gain for the Dow comes after Disney shares soared more than 5% on better-than-expected earnings. Disney’s revenues for its media and networks segment topped a FactSet estimate, while sales for the company’s parks, studio entertainment and direct-to-consumer businesses also beat expectations. Stocks rose to record highs on Thursday after the world’s two largest economies reportedly agreed to remove existing trade tariffs, sparking a huge rotation into equities and out of bonds. The U.S. 10-year Treasury yield jumped more than 15 basis points at one point on Thursday, its biggest upward move since the 2016 election. A spokesperson for the Chinese commerce ministry said that both sides had agreed to cancel existing tariffs in phases. A U.S. official also said reportedly both sides agreed to roll back the levies in tranches. Furthermore, data released Friday morning showed that Chinese exports and imports declined less than expected in the month of October. Meanwhile, Jean-Claude Juncker, president of the European Commission, said there “won’t be any auto tariffs” from the U.S. on Europe next week. U.S. President Donald Trump has until Nov. 13 to decide whether he will pursue with car tariffs on the EU. The increasingly positive tone around global trade put the major indexes on track for solid weekly gains. Entering Friday’s session, the Dow is up 1.2% week to date. The S&P 500 and Nasdaq Composite are both up 0.6% for the week through Thursday’s close. It would be the third straight week of gains for the Dow while the S&P 500 headed for its fifth straight weekly gain. The Nasdaq was on pace for a six-week winning streak.  On the data front, consumer sentiment figures are due out at 10 a.m. ET, as well as wholesale trade numbers. Shares in Asia were mostly lower on Friday as investors digested recent developments on the U.S.-China trade front. Mainland Chinese shares shed earlier gains to slip on the day. The Shanghai composite declined 0.49% to 2,964.18 and the Shenzhen component dipped 0.22% to 9,895.34. The Shenzhen composite also slipped 0.187% to approximately 1,648.68. Hong Kong’s Hang Seng index shed 0.84%, as of its final hour of trading. South Korea’s Kospi declined 0.33% to close at 2,137.23. Japanese shares bucked the overall trend regionally as the Nikkei 225 gained 0.26% to close at 23,391.87. The Topix index also rose 0.27% to end its trading day at 1,702.77. Crude oil futures fell on Friday amid lingering uncertainty on whether, and when, the United States and China will agree a long-awaited deal to end their bitter trade dispute, the gloom compounded by rising crude inventories in the United States. Brent crude, the global benchmark, was down 98 cents, or 1.6%, at $61.31 a barrel, after gaining 0.9% in the previous session. Brent is set to rise 0.4% for the week. U.S. West Texas Intermediate (WTI) crude was down 86 cents, or 1.5%, at $56.29 a barrel. The contract rose 1.4% on Thursday and is set to rise 0.8% for the week. Gold prices inched lower on Friday and were on track for their biggest weekly decline in 2-1/2 years as a stronger dollar weighed, while optimism around U.S.-China trade talks dented bullion’s safe-haven appeal. Spot gold was down 0.1% at $1,465.97 per ounce, poised for its biggest weekly drop - about 3% - since May 2017. On Thursday, prices fell to their lowest since Oct. 1 at $1,460.75. U.S. gold futures were steady at $1,466.90.