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Stocks May Open Higher On Optimism About Trade Talks - U.S. Commentary


Following the recovery from early weakness last Friday, stocks are likely to extend the upward move in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 109 points.

Early buying interest may be generated amid optimism about the next round of trade talks between the U.S. and China due to take place later this week.

Treasury Secretary Steven Mnuchin will lead the U.S. delegation to Beijing as the world's two largest economies seek to reach a trade deal before an early March deadline.

A report from Axios said President Donald Trump's advisers have informally discussed holding a summit with Chinese President Xi Jinping at Mar-a-Lago next month.

Two administration officials with direct knowledge of the internal discussions told Axios the meeting could come as soon as mid-March but stressed that nothing is set.

The report comes after Trump confirmed last week that he would not meet with Xi ahead of the deadline, when a jump in tariffs on Chinese goods is currently set to take effect.

Trump could delay the tariff increase if the talks between U.S. and Chinese officials continue to make progress toward a trade deal.

The uncertainty may keep buying interest somewhat subdued along with the lack of major U.S. economic data scheduled to be released today.

Reports on consumer and producer price inflation, import and export prices and industrial production are likely to attract attention in the coming days.

After coming under pressure early in the session, stocks showed a significant recovery over the course of the trading day on Friday. The major averages climbed well off their worst levels of the day before ending the session mixed.

A late-day spike lifted the Nasdaq and the S&P 500 into positive territory, although the Dow still ended the day down 63.20 points or 0.3 percent at 25,106.33. The Nasdaq edged up 9.85 points or 0.1 percent to 7,298.20 and the S&P 500 inched up 1.83 points or 0.1 percent to 2,707.88.

Despite the mixed performance on the day, the major averages all moved higher for the week. The Nasdaq climbed by 0.5 percent, while the Dow rose by 0.2 percent and the S&P 500 crept up by less than a tenth of a percent.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index surged up by 1.4 percent, while Australia's S&P/ASX 200 Index dipped by 0.2 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index has jumped by 1.1 percent, the German DAX Index and the U.K.'s FTSE 100 Index are up by 0.9 percent and 0.8 percent, respectively.

In commodities trading, crude oil futures are sliding $0.43 to $52.29 a barrel after edging up $0.08 to $52.72 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,309, down $9.50 from the previous session's close of $1,318.50. On Friday, gold rose $4.30.

On the currency front, the U.S. dollar is trading at 110.38 yen compared to the 109.73 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1308 compared to last Friday's $1.1323.

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