Tuesday August 27th

27-08-2019

Dow set to rise more than 100 points as Street monitors US-China trade war

U.S. stock index futures indicated a slightly higher open Tuesday as investors monitor developments in trade relations between Washington and Beijing. As of 8:30 a.m. ET, Dow Jones Industrial Average futures were trading 82 points higher and pointed to gain of more than 135 points at the open, while S&P 500 and Nasdaq 100 futures both looked set to open fractionally higher. Sentiment got a lift again on Tuesday after China announced measures aimed at boosting consumption, including potentially removing car-buying restrictions. Auto stocks rose broadly on the news. Ford Motor and General Motors gained 0.6% and 0.4%, respectively. Fiat Chrysler and Ferrari rose more than 1% each on light volume trading. Comments from two of the world’s two largest economies on Monday suggested a potential rapprochement following an escalation of trade tensions over the weekend. Following the Group of Seven (G-7) summit in Biarritz, France on Monday, President Donald Trump predicted a trade deal with China, citing economic pressure on Beijing, while China also called for a resolution to the ongoing dispute. Stocks rallied on Trump’s comments. The Dow, S&P 500 and Nasdaq Composite all rose more than 1% as semiconductor stocks and Apple climbed. However, Trump’s claims at the G-7 that China called top U.S. trade negotiators to reignite discussions has been called into question by Hu Xijin, editor-in-chief of the Global Times, who said in a tweet that negotiators from both countries did not talk over the phone. Hu’s tabloid is run by the People’s Daily, the official newspaper of China’s ruling Communist Party. Stocks in Asia edged up on Tuesday as investors watched closely for developments on the U.S.-China trade war following a recent escalation. Mainland Chinese stocks rose on the day as they led gains in the region, with the Shanghai composite adding 1.35% to around 2,902.19 and the Shenzhen component gaining 1.86% to 9,443.18. The Shenzhen composite advanced 1.867% to about 1,595.82. Hong Kong’s Hang Seng index, bucked the overall trend regionally to slip about 0.3%, as of its final hour of trading. Japan’s Nikkei 225 gained 0.96% to close at 20,456.08. The Topix also rose 0.79% to end its trading day at 1,489.69. South Korea’s Kospi closed 0.43% higher at 1,924.60. Oil prices rose on Tuesday after U.S. President Donald Trump predicted a trade deal with China after positive comments by Beijing, calming nerves after a round of tit-for-tat tariff hikes had sent markets reeling. Brent crude was up by 26 cents, or 0.4%, at $58.96 a barrel by 0636 GMT, after falling 1% in the previous session, dropping for a third day in a row. U.S. West Texas Intermediate (WTI) crude futures were up by 23 cents, or 0.4%, at $53.87 a barrel, having also dropped 1% on Monday for a fourth day of declines. Gold rose on Tuesday as uncertainty over the U.S.-China trade dispute kept investors on edge and drove inflows into the safe haven metal. Spot gold was up 0.3% to $1,529.81 per ounce. During trading on Monday, the metal had hit its highest level since April 2013 at $1,554.56. U.S. gold futures were up 0.1% at $1,539.20.