Plus   Neg

U.S. Stocks May Continue To Experience Choppy Trading

wallstreet1 up 032918 15jan20 lt

Following the lackluster performance seen in the previous session, stocks may continue to experience choppy trading early on Wednesday. The major index futures are currently pointing to a modestly lower open for the markets, with the Dow futures down by 35 points.

Uncertainty about the impact of the U.S.-China phase one trade deal may keep traders on the sidelines as they await the official signing of the deal set for later in the day.

The news of the phase one deal contributed to recent upward momentum on Wall Street, helping propel the markets to new record highs.

However, traders now seem less enthusiastic following news that tariffs on billions of dollars worth of Chinese goods will remain in place until a phase two deal is completed.

Under the phase one deal, the U.S. will scrap a new round of tariffs and cut the tariffs on $120 billion worth of Chinese goods in half to 7.5 percent, but a 25 percent tariff on $250 billion worth of Chinese imports will remain in place.

The remaining tariffs could continue to hamper economic growth for the foreseeable future, with a phase two deal seen as potentially more difficult to complete.

On the U.S. economic front, a report released by the Labor Department showed a modest increase in U.S. producer prices in the month of December.

The Labor Department said its producer price index for final demand inched up by 0.1 percent in December after coming in unchanged in November. Economists had expected prices to rise by 0.2 percent.

Excluding food and energy prices, core producer prices still crept up by 0.1 percent in December after dipping by 0.2 percent in November. Core prices were also expected to increase by 0.2 percent.

A separate report from the New York Federal Reserve showed a modest acceleration in the pace of growth in regional manufacturing activity in the month of January.

The New York Fed said its general business conditions index edged up to 4.8 in January from a revised 3.3 in December, with a positive reading indicating growth in regional manufacturing activity.

Economists had expected the general business conditions index to come in unchanged compared to the 3.5 originally reported for the previous month.

Later in the day, the Federal Reserve is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.

Stocks showed a lack of direction throughout the trading session on Tuesday, with the major averages spending the day bouncing back and forth across the unchanged line before eventually closing mixed.

The Dow reached a record intraday high but pulled back off its best levels to end the day up just 32.62 points or 0.1 percent at 28,939.67.

Meanwhile, the Nasdaq and the S&P 500 pulled back off Monday's record closing highs. The Nasdaq slipped 22.60 points or 0.2 percent to 9,251.33 and the S&P 500 edged down 4.98 points or 0.2 percent to 3,283.15.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Wednesday. Japan's Nikkei 225 Index slid by 0.5 percent, while Hong Kong's Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.'s FTSE 100 Index has inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index are both down by 0.2 percent.

In commodities trading, crude oil futures are edging down $0.07 to $58.16 a barrel after inching up $0.15 to $58.23 a barrel on Tuesday. Meanwhile, an ounce of gold is trading at $1,552.50, up $7.90 compared to the previous session's close of $1,544.60. On Tuesday, gold fell $6.

On the currency front, the U.S. dollar is trading at 109.83 yen compared to the 109.99 yen it fetched at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.1148 compared to yesterday's $1.1128.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT