Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are currently pointing to a higher opening on Monday following the modest pullback seen last week.
The markets may benefit from continued optimism about a U.S.-China trade agreement after a tabloid run by China?s ruling Communist Party discounted ?negative? media reports and said the economic superpowers are ?very close? to a phase one deal.
China also remains committed to continuing talks for a phase two or even a phase three deal with the United States, the state-backed Global Times said on Twitter.
President Donald Trump and Chinese President Xi Jinping have also recently made positive comments about a potential trade deal despite reports of complications arising that could delay the agreement until next year.
News on the merger-and-acquisition front may also generate positive sentiment, as the deals suggest companies remain confident even with the uncertainty created by the U.S.-China trade dispute.
Nonetheless, overall trading activity may be somewhat subdued ahead of the Thanksgiving Day holiday on Thursday.
A lack of major U.S. economic data may also keep traders on the sidelines ahead of the release of reports on new home sales, consumer confidence, durable goods orders, and personal income and spending in the coming days.
After moving mostly lower over the past few sessions, stocks turned in a lackluster performance during trading on Friday. The major averages showed a lack of direction but managed to end the session modestly higher.
The Dow rose 109.33 points or 0.4 percent to 27,875.62, the Nasdaq edged up 13.67 points or 0.2 percent to 8,519.88 and the S&P 500 inched up 6.75 points or 0.2 percent to 3,110.29.
Despite the gains on the day, the major averages all moved lower for the week. The Dow fell by 0.5 percent, while the Nasdaq and the S&P 500 dipped by 0.2 percent and 0.3 percent, respectively.
The choppy trading on the day came as traders seemed reluctant to make significant moves amid lingering uncertainty about a U.S.-China trade deal.
Recent reports have suggested the signing of a phase one trade deal could be delayed until next year as U.S. and Chinese officials struggle to reach agreement on core issues.
The next round of U.S. tariffs on Chinese goods is set to take effect on December 15th, potentially complicating efforts to reach an agreement.
In remarks at Bloomberg’s New Economy Forum in Beijing, Chinese President Xi Jinping said China wants to work toward a phase one agreement on the basis of mutual respect and equality but will fight back if necessary.
Xi met with former U.S. Secretary of State Henry Kissinger at the forum, reportedly describing U.S.-China relations as being at a critical juncture
“China and the United States should step up communication on strategic concerns to avoid misjudgment and enhance mutual understanding,” Xi told Kissinger, according to China’s state-run Xinhua News Agency.
Meanwhile, President Donald Trump said in an interview on Fox News this morning that a trade agreement with China is “very close” and that the two economic superpowers have a “very good chance to make a deal.”
Traders largely shrugged off a report from the University of Michigan showing a much bigger than expected upward revision to its reading on U.S. consumer sentiment in the month of November.
The report said the consumer sentiment index for November was upwardly revised to 96.8 from the preliminary reading of 95.7. The revised reading is well above the final October reading of 95.5.
Steel stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Steel Index up by 2.1 percent.
Significant strength also emerged among natural gas stocks, as reflected by the 1.5 percent gain posted by the NYSE Arca Natural Gas Index.
The strength in the natural gas sector came amid a substantial increase by the price of the commodity, as natural gas for December delivery jumped $0.098 or 3.8 percent to $2.665 per million BTUs.
Banking and transportation stocks also moved to the upside on the day, while notable weakness among computer hardware stocks led to a 1.5 percent drop by the NYSE Arca Computer Hardware Index.
