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U.S. Stocks May Extend Recent Run To Record Highs

wallstreet sep4 05nov19 lt

Stocks are likely to move to the upside in early trading on Tuesday, extending the upward move seen over the two previous sessions. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 81 points.

The markets may continue to benefit from optimism about a potential U.S.-China trade deal, with President Donald Trump and Chinese President Xi Jinping widely expected to sign phase one of an agreement sometime this month.

As part of the deal, the U.S. is likely to scrap tariffs on about $156 billion worth of Chinese imports currently set to take effect on December 15th.

A report from the Financial Times said the U.S. is also considering China's request to lift the 15 percent tariff on about $125 billion worth of Chinese goods that went into effect on September 1st.

A person familiar with Beijing's negotiating position told Reuters that China is continuing to press Washington to "remove all tariffs as soon as possible."

In related news, the Commerce Department recently released a report showing the U.S. trade deficit narrowed in the month of September, as the value of imports slumped by more than the value of exports.

The Commerce Department said the trade deficit narrowed to $52.5 billion in September from a revised $55.0 billion in August. The narrower deficit matched economist estimates.

The deficit shrank as the value of imports tumbled by 1.7 percent to $258.4 billion, while the value of exports slid by 0.9 percent to $206.0 billion.

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

The ISM's non-manufacturing index is expected to rise to 53.4 in October after slumping to 52.6 in September, with a reading above 50 indicating growth in the service sector.

Stocks moved mostly higher during the trading day on Monday, extending the strong upward move seen in the previous session. With the continued advance, the major averages all reached new record closing highs.

The major averages finished the session off the best levels of the day but still firmly in positive territory. The Dow climbed 114.75 points or 0.4 percent to 27,462.11, the Nasdaq advanced 46.80 points or 0.6 percent to 8,433.20 and the S&P 500 rose 11.36 points or 0.4 percent to 3,078.27.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index surged up by 1.8 percent as trading resumed after a long weekend, while China's Shanghai Composite Index climbed by 0.5 percent.

The major European markets have shown more modest moves to the upside on the day. While the German DAX Index has inched up by 0.1 percent, the French CAC 40 Index and the U.K.'s FTSE 100 Index are both up by 0.3 percent.

In commodities trading, crude oil futures are climbing $0.43 to $56.97 a barrel after rising $0.34 to $56.54 a barrel on Monday. Meanwhile, after edging down $0.30 to $1,511.10 an ounce in the previous session, gold futures are sliding $13.60 to $1,497.50 an ounce.

On the currency front, the U.S. dollar is trading at 108.88 yen compared to the 108.58 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1098 compared to yesterday's $1.1128.

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