The major U.S. index futures are pointing to a higher opening on Tuesday, with stocks likely to add to the modest gains posted in the previous session.
The upward momentum on Wall Street comes amid a positive reaction to comments from Chinese Xi Jinping regarding the trade dispute between China and the U.S.
Xi promised to lower import tariffs on products including cars and take other steps to further open the world’s second-largest economy.
U.S. stocks failed to sustain early gains on Monday amid lingering concerns about a potential trade war between the U.S. and China.
There was some initial optimism when President Donald Trump made a conciliatory gesture toward Chinese leadership.
“President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!” Trump tweeted.
Powered by bargain hunting after Friday’s drubbing, the Dow jumped 350 points at one point. However, traders quickly booked profits, leaving the major averages only fractionally higher.
Stocks accelerated toward the unchanged line after a report from the New York Times that the FBI had raided the office of Michael Cohen, President Donald Trump’s personal lawyer
The Dow Jones Industrial Average rose 0.2%, or 47 points, to 23,980. The S&P 500 gained 9 points, or 0.3%, to 2,613. The Nasdaq Composite Index rose 35 points, or 0.5%, to 6,950.
Commodity, Currency Markets
Crude oil futures are spiking $1.21 to $64.63 a barrel after jumping $1.36 to $63.42 a barrel on Monday. Meanwhile, after climbing $4 to $1,340.10 an ounce in the previous session, gold futures are rising $1.30 to $1,341.40 an ounce.
On the currency front, the U.S. dollar is trading at 107.12 yen compared to the 106.77 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.2352 compared to yesterday’s $1.2321.
Asian stocks recovered from a weak start to close broadly higher on Tuesday after Chinese President Xi Jinping promised to lower import tariffs on products including cars and take other steps to further open the world’s second-largest economy, helping soothe investor jitters over an escalating trade dispute with the United States.
China’s Shanghai Composite Index jumped 52.36 points or 1.7 percent to close at 3,190.65 after Xi sought to defuse trade tensions with the U.S. by lifting limits of foreign investment in automobile and aircraft industries. Hong Kong’s Hang Seng index surged up 499.16 points or 1.7 percent to 30,728.74.
Japanese shares surged, led by automakers after Xi said his government would “significantly lower” tariffs on vehicle imports this year and raise the foreign ownership limit in the automobile sector “as soon as possible.”
The Nikkei 225 Index rose 116.06 points or 0.5 percent to 21,794.32, while the broader Topix index ended up 0.4 percent at 1,731.94. Honda Motor rallied 2.6 percent, Toyota Motor advanced 1.4 percent and Mazda Motor added 0.8 percent.
Industrial robot maker Fanuc climbed 3.3 percent and construction machinery maker Komatsu jumped 2.9 percent.
On the data front, Japanese consumer confidence held steady at the end of the first quarter, survey data from Cabinet Office showed. The seasonally adjusted consumer confidence index came in at 44.3 in March, unchanged from February.
Australian shares rose sharply as higher base metal prices following the remarks by Xi on opening up the world’s second-largest economy helped lift mining stocks.
The benchmark S&P/ASX 200 Index climbed 48.30 points or 0.8 percent to close at 5,857.00, while the broader All Ordinaries Index ended up 47.10 points or 0.8 percent at 5,951.80.
Mining heavyweights BHP Billiton and Rio Tinto rose 0.8 percent and 2.8 percent, respectively, while smaller rival Fortescue Metals Group rallied 3.7 percent and South32 jumped 5.1 percent. The big four banks rose between 1.1 percent and 1.5 percent.
Australian consumer confidence weakened for the third straight time during the week ended April 8th, a weekly survey compiled by the ANZ bank and Roy Morgan Research showed.
Another survey from National Australia Bank revealed that Australian business conditions weakened in March from record highs.
European stocks have moved mostly higher Tuesday after Chinese President Xi Jinping sought to defuse trade tensions with the U.S. by lifting limits of foreign investment in automobile and aircraft industries. He also outlined various measures to open up the world’s second-largest economy.
While the German DAX Index has advanced by 0.9 percent, the U.K.’s FTSE 100 Index is up by 0.6 percent and the French CAC 40 Index is up by 0.5 percent.
Vedanta shares have rallied in London. The company said it is evaluating further courses of action after its application for the renewal of consent to operate its existing smelter plant at Tuticorin (India) was rejected for want of more clarifications.
French luxury goods conglomerate LVMH has also soared more than 5 percent after a solid trading update.
Bayer has jumped on a Wall Street Journal report that the U.S. Justice Department has decided to allow the German company’s deal to acquire Monsanto Co., valued at more than $60 billion.
Meanwhile, Givaudan shares have tumbled after the Swiss fragrance and flavor maker reported weaker than expected sales for the first quarter.
On the data front, French industrial production recovered in February, figures from the statistical office Insee showed. Industrial production grew 1.2 percent month-on-month in February following a 1.8 percent slump in January.
U.S. Economic Reports
Producer prices in the U.S. increased by more than expected in the month of March, according to a report released by the Labor Department.
The Labor Department said its producer price index rose by 0.3 percent in March after edging up by 0.2 percent in February. Economists had expected producer prices to inch up by 0.1 percent.
Excluding food and energy prices, core producer prices also increased by 0.3 percent in March after rising by 0.2 percent in the previous month. Core prices had been expected to rise by 0.2 percent.
At 1 pm ET, the Treasury Department is scheduled to announce the results of its auction of $30 billion worth of three-year notes.
Atlanta Federal Reserve President Raphael Bostic is due to speak at the John T. Dunlop lecture on “Fair Housing in the U.S.: Past, Present, and Future?” in Cambridge, Massachusetts, at 6:30 pm ET.
by RTTNews Staff Writer
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