Tuesday November 5th


Stocks set to rise for a third day on China trade optimism as record-setting rally continues

U.S. stock index futures were set to open higher on Tuesday, following a record close in the previous session, as investors grew more bullish on a potential U.S.-China trade deal as both sides consider more rollbacks on tariffs. Futures on the Dow Jones Industrial Average rose 70 points and indicated a positive open of more than 58 points, while futures on the S&P 500 and Nasdaq Composite were also higher. Major averages are on track for a third straight positive session. China is pushing President Donald Trump to remove more tariffs on about $125 billion worth of Chinese goods imposed in September as part of the “phase one” trade deal, Reuters reported Monday evening. A U.S. official told Reuters the fate of the Dec. 15 tariffs is being considered as part of negotiations. “It would at least further temper the negative economic impact of tariffs and take us back to where we were on July 31st, the day before they were initially threatened,” Peter Boockvar, chief investment officer at Bleakley Advisory Group, said in a note on Tuesday. The two sides are in the process of picking a new location for the deal signing after the original meeting in mid-November was canceled due to unrelated reasons. China said Friday that it has reached a consensus with the U.S. in principle after talks last week. Strong earnings, more promising economic data and optimism over a resolution on trade with China drove the Dow to all-time highs on Monday, following the S&P 500 and Nasdaq’s new records last week. The Dow’s year-to-date gain now stands at around 18%, while the S&P 500 is up more than 22% and the Nasdaq more than 27% so far this year. Traders will also have eyes on a raft of economic data Tuesday morning. September balance of trade, import and export figures are due for release at 9:30 a.m. ET before November Redbook data at 9:55 a.m. ET. Composite and services PMI (purchasing managers’ index) numbers for October are expected at 10:45 a.m. ET, followed by non-manufacturing PMI and a host of other non-manufacturing figures at 11: a.m. ET. On the earnings front, Allergan and Becton Dickinson are set to report before the bell on Tuesday. Stocks in Asia rose on Tuesday following record closes overnight on Wall Street. Shares in Japan led the region as they touched 2019 highs after returning from a Monday holiday. The Nikkei 225 closed 1.76% higher at 23,251.99. The Topix index also jumped 1.66% to end its trading day at 1,694.16. Mainland Chinese stocks were higher on the day, with the Shanghai composite up 0.54% to about 2,991.56 and Shenzhen composite gaining 0.541% to around 1,655.60. The Shenzhen component added 0.71% to 9,938.61. Hong Kong’s Hang Seng index was 0.18% higher, as of its final hour of trading. In South Korea, the Kospi closed 0.58% higher at 2,142.64. Oil prices rose on Tuesday on hopes for a U.S.-China trade agreement and optimism that Washington could roll back some of the tariffs it has imposed on Chinese imports. Brent crude futures were up 51 cents at $62.64 a barrel after gaining 0.7% in the previous session. U.S. crude futures were up 42 cents at $56.96 a barrel. They gained 0.6% on Monday. Gold prices edged down on Tuesday in a second straight session of losses, as hopes of a U.S.-China trade pact boosted the dollar and spurred appetite for riskier assets, blunting investors’ interest in holding the non-yielding bullion. Spot gold was down 0.3% at $1,505.27 per ounce by 0318 GMT, while U.S. gold futures inched down 0.2% to $1,507.70 per ounce.