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U.S. Stocks May See Further Upside As Traders Bask In Post-Trade Deal Glow

wallstreet1 061518 16jan20 lt

Stocks may move to the upside in early trading on Thursday, adding to the modest gains posted in the previous session. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 91 points.

The markets may continue to benefit from recent upward momentum following the official signing of the U.S.-China phase one trade deal on Wednesday.

The deal did not address some major issues and leaves significant tariffs in place, but the agreement has still helped lift some of the uncertainty generated by the trade war between the two economic superpowers.

Buying interest may also be generated in reaction to some upbeat U.S. economic news, including a report from the Labor Department showing an unexpected decrease in initial jobless claims in the week ended January 11th.

The Labor Department said initial jobless claims fell to 204,000, a decrease of 10,000 from the previous week's unrevised level of 214,000. The drop came as a surprise to economists, who had expected jobless claims to inch up to 216,000.

The Commerce Department also released a report showing U.S. retail sales rose in line with economist estimates in the month of December, with a sharp pullback in auto sales more than offset by strength in other areas.

The report said retail sales climbed by 0.3 percent in December, matching the upwardly revised increase in November.

Economists had expected retail sales to rise by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.

Excluding auto sales, retail sales increased by 0.7 percent in December after coming in unchanged in November. Ex-auto sales had been expected to climb by 0.5 percent.

Additionally, the Philadelphia Federal Reserve released a report showing a substantial acceleration in the pace of growth in regional manufacturing activity in the month of January.

Shortly after the start of trading, the National Association of Home Builders is scheduled to release its report on homebuilder confidence in the month of January. The housing market index is expected to dip to 75 in January after jumping to 76 in December.

The Commerce Department is also due to release its report on business inventories in the month of November. Business inventories are expected to edge down by 0.1 percent.

Stocks climbed to new record intraday highs in morning trading on Wednesday but gave back some ground over the course of the session. The major averages pulled back well off their best levels, although the Dow and the S&P 500 still ended the session at new record closing highs.

The Dow climbed 90.55 points or 0.3 percent to 29,030.22 and the S&P 500 rose 6.14 points or 0.2 percent to 3,289.29, while the Nasdaq pulled back near the unchanged line before closing up 7.37 points or 0.1 percent at 9,258.70.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index inched up by 0.1 percent and Hong Kong's Hang Seng Index rose by 0.4 percent, although China's Shanghai Composite Index bucked the uptrend and slid by 0.5 percent.

Meanwhile, the major European markets have moved to the downside on the day. While the U.K.'s FTSE 100 Index has fallen by 0.4 percent, the German DAX Index is down by 0.1 percent and the French CAC 40 Index is just below the unchanged line.

In commodities trading, crude oil futures are inching up $0.14 to $57.95 a barrel after sliding $0.42 to $57.81 a barrel on Wednesday. Meanwhile, after climbing $9.40 to $1,554 an ounce in the previous session, gold futures are slipping $1.20 to $1,552.80 an ounce.

On the currency front, the U.S. dollar is trading at 109.99 yen compared to the 109.90 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.1154 compared to yesterday's $1.1150.

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