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U.S. Stocks May Open Higher Amid Optimism About Trade Deal

wallstreet oct01 13jan20 lt

Following the pullback seen over the course of the previous session, stocks are likely to move back to the upside 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 104 points.

Early buying interest may be generated amid optimism about the phase one U.S.-China trade deal due to be signed later this week.

Chinese Vice Premier Liu He is scheduled to visit Washington to sign the deal, which is said to include reduced tariffs on Chinese goods in exchange for increased Chinese purchases of U.S. agricultural products.

In an interview with Fox News on Sunday, Treasury Secretary Steven Mnuchin said the agreement calls for China to purchase $40 to $50 billion worth of U.S. agricultural products annually.

Mnuchin described the agreement as "very, very extensive," although the deal will not completely resolve the trade dispute between the U.S. and China.

Overall trading activity may be somewhat subdued as traders look ahead to earnings news from financial giants Citigroup (C), JPMorgan Chase (JPM), Bank of America (BAC) and Goldman Sachs (GS) in the coming days.

Reports on consumer and producer price inflation, retail sales, homebuilder confidence, and industrial production may also attract attention later this week.

After ending the previous two sessions higher, stocks opened higher again on Friday but headed south in the late morning and finished in the red, pulling back from record closing highs.

The major averages finished with mild losses as the Dow shed 133.13 points or 0.5 percent to 28,823.77, while the Nasdaq dipped 24.57 points or 0.3 percent to 9,178.86 and the S&P 500 fell 9.35 points or 0.3 percent to 3,265.35.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Monday, with the Japanese markets closed for a holiday. China's Shanghai Composite Index climbed by 0.8 percent, while South Korea's Kospi jumped by 1 percent.

Meanwhile, the major European markets have turned mixed on the day. While the German DAX Index has edged down by 0.1 percent, the French CAC 40 Index is up by 0.1 percent and the U.K.'s FTSE 100 Index is up by 0.3 percent.

In commodities trading, crude oil futures are inching up $0.10 to $59.14 a barrel after sliding $0.52 to $59.04 a barrel last Friday. Meanwhile, an ounce of gold is trading at $1,555.80, down $4.30 from the previous session's close of $1,560.10. On Friday, gold climbed $5.80.

On the currency front, the U.S. dollar is trading at 109.83 yen compared to the 109.45 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is valued at $1.1123 compared to last Friday's $1.1121.

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