Monday November 25th


Dow futures rise 60 points as the stock rally looks to rebound from a one-week pause

U.S. stock index futures were slightly higher Monday as Wall Street looked for the market’s rally to record highs to resume amid increasing expectations that China and the U.S. will reach a so-called phase one trade deal. Around 7:15 a.m. ET, Dow Jones Industrial Average futures were up 68 points, indicating a gain of 79 points at the open. S&P 500 and Nasdaq 100 futures also pointed to solid opening gains. China will raise penalties for violating intellectual property rights as both countries, according to the guidelines published by the Chinese government on Sunday. The guidelines added China will think about lowering punishment thresholds for IP theft. Meanwhile, U.S. national security advisor Robert O’Brien said on Saturday that a phase one trade deal with China could happen before the end of the year. He also cautioned, however, that President Donald Trump would not ignore ongoing protests in Hong Kong. Pro-democracy candidates in the embattled Asia city romped to a symbolic majority in district council elections over the weekend, after residents turned out to vote en masse following six months of anti-government protests. Hong Kong’s Hang Seng index surged 1.5% to close at 26,993.04 after pro-democracy candidates surged to a landslide victory following a record voter turnout. 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. But recent optimism around trade lifted equities to record highs. The Dow and S&P 500 are up 3.4% and 2.9%, respectively, over the past month. The Nasdaq Composite is up 3.4% over that time as well.  The market’s rally took a pause last week, with the S&P 500 snapping a six-week winning streak. The Dow fell for the first week in five while the Nasdaq ended a seven-week run. Sentiment also got a lift on Monday after two big deals in Corporate America were confirmed. Charles Schwab confirmed it will acquire rival TD Ameritrade for $26 billion in an all-stock deal. The deal, upon completion, will create a new company with more than $5 trillion in assets. TD Ameritrade shares rose 3.3% while Schwab’s stock dipped 0.8%. CNBC first reported on the deal last week. LVMH has reached a deal to buy jeweler Tiffany for $16.2 billion in cash, or $135 per share. The acquisition, which CNBC first reported on Sunday, is expected to close in the middle of 2020. On the data front, Dallas Fed manufacturing figures for November will be released at around 10:30 a.m. ET. Shares in Asia were higher on Monday, as investors reacted to Hong Kong’s district council elections amid months of civil unrest in the city. Hong Kong’s Hang Seng index led gains among major markets regionally as it jumped 1.5% to close at 26,993.04. Mainland Chinese stocks were mixed on the day. The Shanghai composite rose 0.72% to around 2,906.17, while the Shenzhen component was just below the flatline at 9,626.36. The Shenzhen composite also shed 0.439% to approximately 1,600.45. Elsewhere, the Nikkei 225 in Japan rose 0.78% to close at 23,292.81. The Topix index also added 0.69% to end its trading day at 1,702.96. South Korea’s Kospi advanced 1.02% to close at 2,123.50. Oil prices held above $63 per barrel on Monday as positive comments from the United States and China rekindled hopes in global markets that the world’s two largest economies could soon sign an interim deal to end their trade war. West Texas Intermediate (WTI) crude gained 7 cents to trade at $57.84, having ended last week little changed after tracking the trade talks through their ups and downs. Brent crude futures gained 10 cents to trade at $63.49 a barrel. The benchmark having also finished little changed last week. Gold edged down to a one-week low on Monday after the United States and China expressed willingness to sign an initial trade deal by year-end, boosting market sentiment and driving investors to assets seen as higher risk. Having slipped for the previous three sessions, spot gold was down 0.32% at $1,457.3 per ounce, after earlier touching its lowest since Nov. 18 at $1,455.90. U.S. gold futures were 0.43% lower at $1,457.2.