US Stocks Likely to Maintain Upward Momentum

By Investors Hub

The major U.S. index futures are pointing to a modestly higher opening on Wednesday, with stocks likely to extend the upward move seen over the past few sessions.

The markets may continue to benefit from optimism about a potential U.S.-China trade deal after President Donald Trump said trade talks are ?going very well.?

?We?re in the final throes of a very important deal ? I guess you could say, one of the most important deals in trade ever,? Trump told reporters at the White House on Tuesday.

Trading activity may be somewhat subdued, however, as the Thanksgiving Day holiday on Thursday will keep some traders away from their desks.

The upcoming holiday has also pushed forward several U.S. economic reports, leading to an avalanche of data that may paint a mixed picture.

After ending Monday?s trading mostly higher, stocks saw some further upside during trading on Tuesday. With the continued upward move, the major averages once again reached new record closing highs.

The major averages ended the day modestly higher. The Dow rose 55.21 points or 0.2 percent to 28,121.68, the Nasdaq edged up 15.44 points or 0.2 percent to 8,647.93 and the S&P 500 inched up 6.88 points or 0.2 percent to 3,140.52.

The modest strength on Wall Street reflected recent upward momentum amid persistent optimism the U.S. and China will ultimately reach a trade agreement.

A statement from China’s Commerce Ministry revealed Chinese Vice Premier Liu He held a phone call with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steve Mnuchin earlier today.

The statement said the two sides discussed how to resolve each other’s core concerns, reached consensus on how to resolve related issues, and agreed to maintain communication on the remaining issues in the first phase of agreement negotiations.

However, traders seemed reluctant to make more significant moves, with some looking to get a head start on the Thanksgiving Day holiday on Thursday.

As if often the case nowadays, traders largely shrugged off the latest economic data, including a report from the Conference Board unexpectedly showing a continued drop in consumer confidence in November.

The Conference Board said its consumer confidence index fell to 125.5 in November from an upwardly revised 126.1 in October.

Economists had expected the consumer confidence index to inch up to 126.9 from the 125.9 originally reported for the previous month.

“Consumer confidence declined for a fourth consecutive month, driven by a softening in consumers’ assessment of current business and employment conditions,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

“However, consumers’ short-term expectations improved modestly, and growth in early 2020 is likely to remain at around 2 percent,” she added. “Overall, confidence levels are still high and should support solid spending during this holiday season.”

A separate report from the Commerce Department showed new home sales pulled back from a significantly upwardly revised level in October.

The Commerce Department said new home sales fell by 0.7 percent to an annual rate of 733,000 in October after surging up by 4.5 percent to an upwardly revised rate of 738,000 in September.

Economists had expected new home sales to jump by 1.1 percent to a rate of 709,000 from the 701,000 originally reported for the previous month.

With the upward revision, new home sales in September were at their highest level since hitting 778,000 in July of 2007.

Gold stocks turned in some of the market’s best performances on the day, driving the NYSE Arca Gold Bugs Index up by 2 percent. The strength in the gold sector came amid an increase by the price of the precious metal.

Considerable strength was also visible among commercial real estate and housing stocks, with the Dow Jones U.S. Real Estate Index and the Philadelphia Housing Sector Index advancing by 1.4 percent and 1.3 percent, respectively.

On the other hand, energy stocks moved sharply lower on the day despite an increase by the price of crude oil.

Reflecting the weakness in the energy sector, the Philadelphia Oil Service Index plunged by 2.5 percent and the NYSE Arca Natural Gas Index tumbled by 2.3 percent.

Computer hardware and networking stocks also saw notable weakness on the day, helping to limit the upside for the broader markets.