Monday December 16th


Dow futures climb 50 points and would be even higher without Boeing’s big drop

U.S. stock index futures rose on Monday, pointing to a fourth straight day of gains on Wall Street as investors continued to digest news of a U.S.-China phase one trade deal. Around 7:50 a.m. ET, Dow Jones Industrial Average futures were up 50 points, indicating a gain of 67 points at the open. Futures on the S&P 500 and Nasdaq also pointed to an upbeat start to the week. Monday’s gains were kept in check, however, by a 4% drop in Boeing. Shares of the aerospace giant fell after The Wall Street Journal reported Sunday the company was nearing a decision on possibly halting or cutting production of the 737 Max. The report follows Federal Aviation Administration chief Steve Dickson telling CNBC last week the 737 Max jet’s return was unlikely to be cleared until 2020. “There are a number of processes, milestones, that have to be completed,” Dickson said. “If you just do the math, it’s going to extend into 2020.” Sentiment was also lifted by strong economic data out of China. Chinese industrial production rose 6.2% in November on a year-over-year basis, topping expectations. Retail sales in China also jumped 8% last month. The U.S. and China announced Friday they will move forward with a so-called phase one trade deal. As part of the agreement, the U.S. will roll back some levies on Chinese products and China will increase its purchases of U.S. agricultural products. Treasury Secretary Steven Mnuchin said will be inked in January. However, some caution remains as details on key aspects of the deal, such as agricultural purchases and the U.S. trade deficit, remain unclear. U.S. Trade Representative Robert Lighthizer has, however, assured that the deal is “totally done.” “I know the American farmer is happy that they’re going to get back their previously largest customer,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “But, getting to the numbers that the administration is hoping for in the next year will be tough.” On the economic calendar, IHS Markit services, manufacturing, and composite PMI (purchasing managers’ index) flash data for December is due at 9:45 a.m. ET. Mainland Chinese stocks jumped at the close on Monday afternoon, as data showed that the country’s industrial output and retail sales rose more than expected in November. The Shanghai composite rose 0.56% to 2,984.39, as the Shenzhen component jumped 1.54% to 10,158.24 and Shenzhen composite bounced 1.56% to 1,686.41. Shenzhen’s Nasdaq-style start-up board ChiNext soared almost 2% to 2,090.14. Hong Kong’s Hang Seng index, however, was down 0.34% during its last hour of trading. But Japan’s Nikkei 225 edged down 0.29% to 23,952.35 after a strong rally on Friday, and the Topix index declined 0.18% to 1,736.87. Over in South Korea, the Kospi edged down 0.10% to 2,168.15. Oil prices on Monday held near three-month highs, supported by last week’s announcement that an initial trade deal had been reached between the United States and China. Brent crude oil futures rose 16 cents to $65.39 a barrel, while West Texas Intermediate crude was unchanged at $60.07. Gold steadied on Monday as a weaker dollar and a lack of details on the “phase one” U.S.-China trade deal offset pressure from gains in the stock markets. Spot gold inched 0.1% higher to $1,477.16 per ounce.