Tuesday April 10th

10-04-2018

Dow set to surge more than 350 points at the open as China’s Xi alleviates trade war fears

U.S. stock index futures posted solid gains ahead of Tuesday's open, boosted by optimistic news coming out of China. Around 8:25 a.m. ET, Dow Jones industrial average futures soared 294 points, indicating a rise of 357.90 points at the open. Nasdaq 100 and the S&P 500 futures also indicated a positive start to Tuesday's session for their respective markets. Concerns over a potential trade war between the U.S. and China have been alleviated somewhat after Chinese President Xi Jinping discussed plans Tuesday to further open up the country's economy, with measures including lowering import tariffs on autos, enforcing legal intellectual property of foreign groups and reducing duties on other consumer products. Ford Motor rose 2.1 percent in the premarket, while General Motors and Tesla both gained nearly 3 percent. Fiat Chrysler also climbed 2.4 percent. Boeing, meanwhile, jumped 2.6 percent. Xi's address also appeared to boost market sentiment overseas Tuesday, with markets in Europe and Asia trading higher during their respective sessions. In Japan, the Nikkei 225 tacked on 0.54 percent, or 116.06 percent, to close at 21,794.32, off an intraday high of 21,933.99 hit earlier. South Korea's Kospi index, meanwhile, erased earlier losses to close higher by 0.27 percent at 2,450.74 despite the move lower in major technology names. Elsewhere, China markets were in positive territory. Hong Kong's Hang Seng Index bounced 1.82 percent by 3:00 p.m. HK/SIN after its tentative open in the morning. On the mainland, the Shanghai composite gained 1.67 percent to end at 3,190.65 and the Shenzhen composite rose 0.51 percent to finish at 1,841.22. The moves in premarket trade follow a roller coaster session Monday on Wall Street. The Dow Jones industrial average rallied more than 400 points during trade before erasing the majority of its gains, as political turbulence within the U.S. administration rattled sentiment. On Monday, the FBI raided the New York office and residence of Michael Cohen, the personal attorney to President Donald Trump. According to NBC News, which cited sources, agents were looking for evidence that was related to a $130,000 payment the lawyer made to porn star Stormy Daniels, prior to the 2016 election. Elsewhere, social media and technology stocks will remain at the forefront of market talk, as the data scandal around Facebook continues to unfold. On Tuesday, Mark Zuckerberg is expected to appear in front of a joint hearing of the Senate Judiciary and Commerce committees. Oil broke above $70 a barrel on Tuesday, extending strong gains from the previous day, as investors grew more optimistic that a trade dispute between the United States and China may be resolved without greater damage to the global economy. Brent crude futures were up $1.47 at $70.12 a barrel, while West Texas Intermediate crude futures rose $1.34 to $64.76 a barrel. The oil price has risen by nearly 4.5 percent in the last two trading days. Gold prices were steady on Tuesday but poised for gains as investors awaited potential U.S. action against the suspected use of chemical weapons in Syria as well as more trade friction. "Geopolitics is taking the main driving seat this week, so gold has potentially got some room for the upside," said Jonathan Butler, commodities analyst at Mitsubishi in London. "A lot will hinge on what is happening geopolitically between Russia, Syria, Iran and all sorts of other countries that could be potentially drawn into this." Spot gold was barely changed, up 0.04 percent at $1,340.70 an ounce at 8:05 a.m. ET, having risen to a near one-week high of $1,338.12 earlier in the session. U.S. gold futures for June delivery dipped 0.11 percent to $1,337.28 an ounce. If gold breaks through resistance of $1,340, it could move back to the late March highs just under $1,360, Butler added.