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U.S. Stocks May Open Higher On Upbeat Chinese Manufacturing Data

wallstreet1 061318 02dec19 lt

Following the pullback seen last Friday, stocks may move back to the upside in early trading on Monday. The major index futures are currently pointing to a modestly higher open for the markets, with the Dow futures up by 18 points.

Early buying interest may be generated in reaction to upbeat Chinese manufacturing data, which has helped alleviate concerns about the impact of the ongoing U.S.-China trade dispute.

Survey data from IHS Markit showed Chinese manufacturing activity expanded at a moderate pace in November, with growth reaching its strongest level since December 2016.

The Caixin manufacturing Purchasing Managers' Index rose slightly to 51.8 from 51.7 in October, signaling an improvement for the fourth consecutive month.

According to an official survey released over the weekend, the manufacturing sector returned to growth in November. The PMI advanced to 50.2 from 49.3, while the non-manufacturing PMI climbed to 54.4 from 52.8.

However, the positive sentiment may be offset by President Donald Trump announcing plans to reinstate tariffs on metal imports from Brazil and Argentina.

"Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers," Trump said in a post on Twitter.

He added, "Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries."

Not long after the start of trading, the Institute for Supply Management is scheduled to release its report on activity in the U.S. manufacturing sector in the month of November.

The ISM's purchasing managers index is expected to inch up to 49.2 in November from 48.3 in October, although a reading below 50 would still indicate a contraction in manufacturing activity.

The Commerce Department is also due to release its report on construction spending in the month of October. Construction spending is expected to rise by 0.4 percent.

After trending higher over the past several sessions, stocks gave back some ground during an abbreviated trading day on Friday. The major averages all moved to the downside, pulling back off Wednesday's record closing highs.

The major averages ended the session just off their worst levels of the day. The Dow fell 112.59 points or 0.4 percent to 28,051.41, the Nasdaq slid 39.70 points or 0.5 percent to 8,665.47 and the S&P 500 dropped 12.65 points or 0.4 percent to 3,140.98.

Despite the pullback on the day, the major averages still moved higher for the week. The Nasdaq surged up by 1.7 percent, the S&P 500 jumped by 1 percent and the Dow climbed by 0.6 percent.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index rose by 0.4 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the U.K.'s FTSE 100 Index has dipped by 0.2 percent, the German DAX Index and the French CAC 40 Index are down by 0.5 percent and 0.6 percent, respectively.

In commodities trading, crude oil futures are jumping $1.05 to $56.22 a barrel after plunging $2.94 to $55.17 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,466.90, down $5.80 from the previous session's close of $1,472.70. On Friday, gold climbed $11.90.

On the currency front, the U.S. dollar is trading at 109.47 yen compared to the 109.49 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1030 compared to last Friday's $1.1018.

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