Friday January 25th

25-01-2019

Dow futures rise triple digits on hopes for an end to the government shutdown

U.S. stock index futures rose ahead of Friday’s open, as investors grew more optimistic about an end to the government shutdown and geared up for another batch of corporate earnings. Dow futures indicated a positive open of more than 170 points as of 9 a.m. ET. Futures on the S&P 500 and Nasdaq were also pointing to a higher start to trading. Stocks rose despite poor quarterly earnings and growth from Intel, while Starbucks shares climbed on stronger-than-expected sales results. Hope for an end to the U.S. government shutdown also rose overnight. A bipartisan group of Senators announced they will propose an amendment to get about one-quarter of the government workforce back to work, at least in the interim. Treasury Secretary Steven Mnuchin also projected confidence about the status trade negotiations between the U.S. and China in comments to Reuters. Mnuchin said both sides were “making a lot of progress” in the talks. Additionally, the Wall Street Journal reported that the Federal Reserve is closer than expected to ending its balance sheet unwind. The Fed’s decision is a key consideration for investors as they gauge the extent to which the central bank will tighten its monetary policy. Intel reported fourth quarter earnings which beat Wall Street expectations but missed on revenue. The company’s 2019 forecast showed revenue growth of just 1 percent, with Intel expecting to report first quarter earnings of 87 cents a share – 14 cents below Wall Street expectations. Intel continues to search for a new CEO, seven months after Brian Krzanich was forced out. The U.S. Senate, after rejecting two shutdown-ending bills, was searching for a way to end a government closure entering its 35th day and threatening the economy, as hundreds of thousands of federal workers missed a second paycheck on Friday. Afterward, a bipartisan group of lawmakers said they were introducing an amendment in the Senate to temporarily reopen the roughly one-quarter of the federal government affected by the longest shutdown in U.S. history. Senator Ben Cardin, one of the Democratic co-sponsors, said he did not think it contained any wall funding. Trump said on Thursday that if Republican Senate Majority Leader Mitch McConnell and Senate Democratic leader Chuck Schumer reached an agreement to end the shutdown, he would support it. Meanwhile, as another week draws to a close, a number of fresh company earnings will be keeping investors busy. Some of the major brands set to report include AbbVie, Colgate-Palmolive, and D.R. Horton — all of which are due to come out before the bell. Investors are also continuing to monitor concerns surrounding a trade deal with China. On Thursday, markets came under pressure after Commerce Secretary Wilbur Ross said that trade negotiations with China were far from complete. “We would like to make a deal but it has to be a deal that will work for both parties,” Ross told CNBC. “We’re miles and miles from getting a resolution.” Ross’ comments come as Washington and Beijing try to remedy their trade disputes, during a tariff cease-fire which is slated to finish at the start of March. Elsewhere, the government shutdown continues to weigh. In the latest surrounding the subject, the Senate blocked bills on Thursday that would fund the government. A Republican-backed proposal and a measure supported by Democrats didn’t acquire the 60 votes they needed to be cleared. This comes as 800,000 federal workers face another round of missed paychecks, and government services suffer due to the shutdown. Major stock indexes in Asia closed higher on Friday despite fresh overnight uncertainties surrounding the ongoing U.S.-China trade negotiations. The mainland Chinese markets, watched in relation to Beijing’s trade fight with Washington, mostly advanced: The Shanghai compositegained around 0.39 percent to close at about 2,601.72. The Shenzhen component rose 0.29 percent to finish its trading week at approximately 7,595.45 while the Shenzhen composite shed earlier gains to close 0.176 percent lower at about 1,319.97. Hong Kong’s Hang Seng index gained 1.65 percent to 27,569.19. The Nikkei 225 in Japan added about 0.97 percent to close at 20,773.56 while the Topix index gained 0.87 percent to finish its trading day at 1,566.10. South Korea’s Kospi advanced 1.52 percent. Oil prices rose on Friday as turmoil in Venezuela triggered concerns that its crude exports could soon be disrupted. Washington on Thursday signalled it could impose sanctions on Venezuela’s oil exports as Caracas descends further into political and economic turmoil. Brent crude oil futures were at $61.62 a barrel at 0755 GMT, 53 cents, or 0.9 percent, above their last close. At one point earlier on Friday, the international benchmark crude rose as high as $61.92 a barrel. Brent, however, has shed about 1.8 percent this week and was on track to post its first week of losses in four weeks. U.S. West Texas Intermediate (WTI) crude futures were at $53.70 per barrel, up 57 cents, or 1.1 percent. Gold edged up on Friday as the dollar eased from a multi-week peak, with bullion seen consolidating in a narrow range supported by concerns about global growth and political uncertainties, including the U.S. government shutdown. Spot gold rose 0.3 percent to $1,284.39 per ounce, as of 7:31 a.m. ET, holding in a tight range of about $6, and on course for a small weekly gain. U.S. gold futures climbed 0.31 percent to $1,283.80 per ounce.