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Futures Pointing To Initial Strength On Wall Street

The major U.S. index futures are currently pointing to a higher opening on Monday, with stocks likely to move back to the upside following the pullback seen over the course of last Friday's trading.

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.

The higher open was the result of continued optimism over easing concerns about a conflict between the U.S. and Iran.

But the markets turned lower in late morning after the Labor Department's closely watched non-farm payroll data showed the pace of job growth slowed by more than expected in the month of December.

The report said non-farm payroll employment climbed by 145,000 jobs in December after spiking by a revised 256,000 in November.

Economists had expected employment to increase by about 164,000 jobs compared to the jump of 266,000 jobs originally reported for the previous month.

Meanwhile, the report said the unemployment rate came in at 3.5 percent in December, unchanged from the previous month and in line with economist estimates.

Commodity, Currency Markets

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.

Asia

Asian stocks ended mixed on Monday after the United States imposed additional sanctions on Iran and rebuffed the Iraqi government's request to begin discussions on pulling out troops.

Reports of another rocket attack on an Iraqi airbase and caution ahead of the signing of a U.S.-China trade agreement this week also kept investors nervous. Chinese Vice Premier Liu He is scheduled to visit Washington this week to sign the trade deal.

Chinese shares gained ground, with electric-vehicle makers surging after the government said it would not make significant cuts to subsidies for new energy vehicles this year.

The benchmark Shanghai Composite Index climbed 23.28 points, or 0.8 percent, to 3,115.57, while Hong Kong's Hang Seng Index surged up 316.74 points, or 1.1 percent, to 28,954.94.

The Japanese markets were closed for the 'Respect for the Aged Day' holiday.

Australian stocks retreated from record highs hit in the previous session. The benchmark S&P/ASX 200 Index dropped 25.30 points, or 0.4 percent, to 6,903.70 as investors assessed the risks facing the Middle East in the longer term. The country's bushfire crisis also weighed on sentiment. The broader All Ordinaries Index ended down 21.70 points, or 0.3 percent, at 7,020.20.

Banks finished flat to slightly lower. Mining heavyweight BHP shed 0.9 percent and rival Rio Tinto eased 0.3 percent. Energy stocks such as Woodside Petroleum, Origin Energy and Oil Search lost 1-2 percent, weighed down by weakness in global crude prices.

Gold miners bucked the weak trend to edge higher. Evolution Mining surged 2.8 percent and Northern Star Resources advanced 1.6 percent.

Seoul stocks rallied on expectations of improved Seoul-Beijing relations. The benchmark Kospi jumped 22.87 points, or 1 percent, to 2,229.26.

Market heavyweight Samsung Electronics rose 0.8 percent to extend gains for the fifth day amid signs of a recovery in chip prices. SK Hynix shares added 1.6 percent.

Europe

European stocks are turning in a lackluster performance on Monday as investors look ahead to the signing of a 'phase one' trade deal between the United States and China this week.

The looming U.S. corporate earnings season also remained on investors' radar, with the big banks scheduled to report results on Tuesday.

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.

ThyssenKrupp shares have risen. According to a report by the Financial Times, the company has stepped up its efforts to sell its ailing factory-building business.

Wirecard has also rallied. The provider of electronic payment and risk management applications announced that Wulf Matthias has resigned as Chairman of the Supervisory board for personal reasons.

CropEnergies has also jumped after its operating profit for the first nine months of the financial year 2019/20 more than tripled.

Utility Pennon Group has soared on a report that private equity firm KKR had made a bid for its waste management unit.

Telecommunications testing company Spirent Communications has also spiked as it increased its full-year profit guidance after a strong finish to 2019.

On the other hand, shares of Lufthansa have dropped after the airline cancelled all flights to and from Tehran until January 20.

U.S. Economic Reports

Boston Federal Reserve President Eric Rosengren is scheduled to speak at the Connecticut Business and Industry Association in Hartford, Connecticut, at 10 am ET.

At 12:40 am ET, Atlanta Fed President Raphael Bostic is due to speak in an armchair chat at the Rotary Club of Atlanta on the economic outlook and monetary policy in Atlanta, Georgia.

Stocks In Focus

Shares of Woodward, Inc. (WWD) and Hexcel Corp. (HXL) are seeing pre-market strength after the two Boeing (BA) suppliers announced a definitive agreement to combine in an all-stock merger of equals.

Yoga apparel maker Lululemon (LULU) may also move to the upside after raising its fiscal fourth quarter earnings and revenue guidance.

On the other hand, shares of Abiomed (ABMD) may come under pressure after the medical device maker reported preliminary fiscal third quarter revenue below analyst estimates.

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