Modupe Gbadeyanka
By Investors Hub
The major U.S. index futures are pointing to a sharply higher open on Monday, with stocks likely to extend the strong upward move seen last week.
Early buying interest is likely to be generated amid a positive reaction to the highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping over the weekend.
At the meeting, Trump and Xi agreed to a 90-day truce in the escalating trade war between the world?s two largest economies as they work to reach a long-term trade deal.
A White House statement said Trump agreed not to raise the tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent on January 1st as planned.
In return, China agreed to purchase a ?not yet agreed upon, but very substantial, amount? of agricultural, energy, industrial, and other product from the U.S.
The White House said the U.S. and China will use the next 90 days to attempt to reach an agreement on issues such as forced technology transfer, intellectual property protection, and non-tariff barriers.
If the two countries are not able to reach an agreement by the end of the time period, the 10 percent tariffs on Chinese goods will be raised to 25 percent.
In remarks to reporters about Air Force One, Trump called the agreement with Xi an ?incredible deal,? claiming it will have an ?incredibly positive impact? on ?every type of product.?
Trump also said China will be ?opening up? and ?getting rid of tariffs,? stating in a subsequent post on Twitter that China has agreed to reduce and remove tariffs on cars coming into the country from the U.S.
After recovering from an early move to the downside, stocks moved mostly higher over the course of the trading session on Friday. The major averages more than offset Thursday’s modest losses, adding to the strong gains posted earlier in the week.
The major averages saw further upside going into the close, ending the day just off their highs of the session. The Dow climbed 199.62 points or 0.8 percent to 25,538.46, the Nasdaq advanced 57.45 points or 0.8 percent to 7,330.54 and the S&P 500 rose 22.40 points or 0.8 percent to 2,760.16.
With the rebound on the day, the major averages moved sharply higher for the week. The Nasdaq soared by 5.6 percent, while the Dow and the S&P 500 spiked by 5.1 percent and 4.8 percent, respectively.
The strength that emerged on Wall Street seemed to reflect optimism ahead of a highly anticipated meeting between President Donald Trump and Chinese President Xi Jinping.
Trump and Xi are due to hold a dinner meeting on Saturday on the sidelines of the G20 summit in Buenos Aires, Argentina.
Ahead of the meeting, Trump has offered mixed remarks about the likelihood the U.S. and China will reach an agreement to end the escalating trade dispute between the world’s two largest economies.
“I think we’re very close to doing something with China, but I don’t know that I want to do it because what we have right now is billions and billions of dollars coming into the United States in the form of tariffs or taxes. So I really don’t know,” Trump said Thursday before departing for the summit.
“But I will tell you that I think China wants to make a deal. I’m open to making a deal,” he added. “But, frankly, I like the deal we have right now.”
In U.S. economic news, MNI Indicators released a report unexpectedly showing a substantial acceleration in the pace of growth in Chicago-area business activity in the month of November.
MNI Indicators said its Chicago business barometer spiked to 66.4 in November after falling to 58.4 in October, with a reading above 50 indicating growth in business activity. Economists had expected the index to edge down to 58.0.
The unexpected jump reflected increases across all five of the barometer’s subcomponents, with resurgent orders, solid output and higher unfinished orders the month’s key drivers.
Utilities stocks showed a significant move to the upside over the course of the trading session, resulting in a 1.8 percent jump by the Dow Jones Utilities Average.
Considerable strength was also visible among transportation stocks, as reflected by the 1.3 percent advance by the Dow Jones Transportation Average. With the gain, the average reached its best closing level in well over a month.
Semiconductor stocks also turned in a strong performance on the day, driving the Philadelphia Semiconductor Index up by 1.5 percent.
Pharmaceutical, software and healthcare stocks also moved notably higher, while oil service stocks fell sharply amid a pullback by the price of crude oil.
