Dipo Olowookere
By Investors Hub
The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to extend the upward move seen over the two previous sessions.
The markets may continue to benefit from optimism about a potential U.S.-China trade deal, as President Donald Trump and Chinese President Xi Jinping are widely expected to sign phase one of an agreement sometime this month.
As part of the deal, the U.S. is likely to scrap tariffs on about $156 billion worth of Chinese imports currently set to take effect on December 15th.
A report from the Financial Times said the U.S. is also considering China?s request to lift the 15 percent tariff on about $125 billion worth of Chinese goods that went into effect on September 1st.
A person familiar with Beijing?s negotiating position told Reuters that China is continuing to press Washington to ?remove all tariffs as soon as possible.?
Stocks moved mostly higher during the trading day on Monday, extending the strong upward move seen in the previous session. With the continued advance, the major averages all reached new record closing highs.
The major averages finished the session off the best levels of the day but still firmly in positive territory. The Dow climbed 114.75 points or 0.4 percent to 27,462.11, the Nasdaq advanced 46.80 points or 0.6 percent to 8,433.20 and the S&P 500 rose 11.36 points or 0.4 percent to 3,078.27.
The strength on Wall Street came as traders remain hopeful about a U.S.-China trade agreement, with Commerce Secretary Wilbur Ross expressing optimism phase one of a trade deal could be signed this month.
“We’re in good shape, we’re making good progress, and there’s no natural reason why it couldn’t be,” Ross said in an interview with Bloomberg on Sunday.
Ross called the phase one agreement “particularly complicated” and acknowledged it is “always possible” the signing of the deal could “slip a little bit.”
In the interview, Ross also said licenses for U.S. firms to sell components to China’s Huawei Technologies would be coming “very shortly.”
The comments from Ross came after a report from China’s Xinhua News Agency last Friday said U.S. and Chinese trade negotiators have “reached consensus on principles.”
President Donald Trump has also continued to express optimism about a trade deal, recently suggesting phase one of an agreement could be signed somewhere in the U.S. as soon as this month.
News on the merger-and-acquisition front also generated some positive sentiment, with shares of Wright Medical Group (WMGI) soaring after the medical device maker agreed to be acquired by larger rival Stryker (SYK) for $30.75 per share in cash.
Regional banks First Horizon (FHN) Iberiabank (IBKC) also posted notable gains after agreeing to combine in an all-stock merger of equals.
Meanwhile, shares of Under Armour (UAA) came under pressure after the athletic apparel maker reported better than expected third quarter results but revealed a federal probe of its accounting practices.
Energy stocks turned in some of the market’s best performances on the day amid a continued increase by the price of crude oil.
Reflecting the strength in the energy sector, the NYSE Arca Natural Gas Index and the Philadelphia Oil Service Index soared 4.6 percent and 4.4 percent, respectively. The NYSE Arca Oil Index also surged up by 2.3 percent.
Significant strength also emerged among transportation stocks, as reflected by the 2.3 percent jump by the Dow Jones Transportation Average. The average ended the session at its best closing level in over six months.
Semiconductor, financial, and steel stocks also saw considerable strength on the day, while gold, housing and utilities stocks showed notable moves to the downside.
