Thursday December 5th


Dow futures rise more than 100 points for second day in a row

U.S. stock index futures traded solidly higher in the premarket on Thursday as Wall Street tried to build on its strong performance from the previous session. Around 7:10 a.m., Dow Jones Industrial Average futures were up 110 points, indicating a gain 103 points points at the open. S&P 500 and Nasdaq 100 futures also rose. Those gains come after the Dow gained more than 100 points on Wednesday in a slight rebound from a steep two-day sell-off. Investors monitored the latest developments around U.S.-China trade talks. Chinese Commerce Ministry spokesman Gao Feng said Thursday the two sides remain in close communications regarding trade. Gao did not, however, give any details on how the negotiations were proceeding. He added that China “believes if both sides reach a phase-one agreement, relevant tariffs must be lowered.” Gao’s comments came after Bloomberg News reported Wednesday, citing sources, that both countries were inching closer to securing an agreement on the amount of tariffs that would be rolled back in a limited trade deal. President Donald Trump also said Wednesday that he believed trade talks with Beijing were going “very well.” The report, along with Trump’s comment lifted sentiment around trade and helped the major averages snap a three-day losing streak. “The last few days have made it clear this is still a market focused on the prospect for some resolution to the trade war with China,” said Willie Delwiche, investment strategist at Baird. “Any hopes that we were moving beyond that seem to be dashed.” China and the U.S. have 10 days to reach a trade deal before additional U.S. tariffs on Chinese goods take effect. Those levies would target an additional $156 billion in Chinese goods. The U.S. and China 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. Stocks in Asia were mostly higher on Thursday as investors digested recent developments on U.S.-China trade. In Japan, the Nikkei 225 gained 0.71% to close at 23,300.09. The Topix index added 0.48% to end its trading day 1,711.41. Mainland Chinese stocks gained on the day, with the Shanghai composite up 0.74% to about 2,899.47 and the Shenzhen component rising 1.15% to 9,799.07. The Shenzhen composite added 1.147% to approximately 1,626.97. Hong Kong’s Hang Seng index gained 0.56%, as of its final hour of trading. South Korea’s Kospi, on the other hand, lagged as it slipped 0.39% to close at 2,060.74. Oil prices rose on Thursday ahead of an OPEC meeting where members are expected to agree on deeper output cuts in an effort to prop up prices and prevent a glut next year. Sources told Reuters that OPEC was seeking to increase production cuts by the group and its allies led by Russia by more than 400,000 barrels per day (bpd) from their current level of 1.2 million bpd. The Organization of the Petroleum Exporting Countries meets on Thursday in Vienna followed by a meeting on Friday with Russia and other producers. That group is known as OPEC+. Brent crude futures were up 66 cents, or 1%, to $63.65 a barrel. Brent surged 3.6% on Wednesday. West Texas Intermediate crude futures were up 33 cents to $58.75 a barrel. They settled 4.2% higher on Wednesday. Gold was little changed on Thursday, hovering below a one-month peak as investors sought further clarity on the U.S.-China trade war in a week of mixed messages. Spot gold was flat at $1,474.40 an ounce, having hit their highest since Nov. 7 at $1,484 the previous day. U.S. gold futures were also unmoved at $1,479.70.