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Stocks May Add To Last Week's Strong Gains - U.S. Commentary


Stocks may move to the upside in early trading on Monday, adding to the strong gains posted last week. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 55 points.

Early buying interest may be generated amid easing trade tensions ahead of a second round of trade talks between the U.S. and China this week.

Ahead of the meeting, President Donald Trump indicated in a post on Twitter that he is working with Chinese President Xi Jinping to get Chinese telecom equipment maker ZTE Corp. "back into business, fast."

ZTE has been crippled by a ban on U.S. supplies to its business, and sources briefed on the matter told Reuters that China has demanded the issue be resolved as a prerequisite for broader trade negotiations.

In a subsequent tweet, Trump expressed optimism about trade talks with China despite claiming past negotiations have been one-sided in favor of Beijing.

"China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries," Trump tweeted. "But be cool, it will all work out!"

Overall trading activity may be somewhat subdued, however, with a lack of major U.S. economic data likely to keep some traders on the sidelines.

Reports on retail sales, homebuilder confidence, housing starts, and industrial production are likely to attract attention in the coming days.

After moving notably higher over the course of trading last Wednesday and Thursday, stocks turned in a lackluster performance during trading on Friday. The major averages spent the day bouncing back and forth across the unchanged line.

The Dow and the S&P 500 reached their best closing levels in nearly two months, but the Nasdaq closed marginally lower. While the Nasdaq edged down 2.09 points or less than a tenth of a percent to 7,402.88, the Dow climbed 91.64 points or 0.4 percent to 24,831.17 and the S&P 500 rose 4.65 points or 0.2 percent to 2,727.72.

Despite the mixed performance on the day, the major averages all moved sharply higher for the week. The Nasdaq surged up by 2.7 percent, and the Dow and the S&P 500 jumped by 2.3 percent and 2.4 percent, respectively.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index climbed by 0.5 percent, while Hong Kong's Hang Seng Index shot up by 1.4 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the German DAX Index has fallen by 0.4 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both down by 0.2 percent.

In commodities trading, crude oil futures are inching up $0.12 to $70.82 a barrel after sliding $0.66 to $70.70 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,318.70, down $2 from the previous session's close of $1,320.70. On Friday, gold dipped $1.60.

On the currency front, the U.S. dollar is trading at 109.49 yen compared to the 109.39 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1987 compared to last Friday's $1.1943.

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