Aug 29, 2019

Dow I U.S. Futures Market Indicator: Dow futures jump more than 200 points after 'calm' trade comments from China

Fred Imbert, Sam Meredith

U.S. stock index futures turned positive Thursday after China said it wished to resolve its protracted trade dispute with the world’s largest economy with a “calm ” attitude.
At around 7:10 a.m. ET, Dow Jones Industrial Average futures rose 263 points, indicating a gain of more than 274 points at the open. Futures on the S&P 500 and Nasdaq 100 were both higher, reversing earlier losses.
When asked about its ongoing trade war with the U.S., China’s commerce ministry reportedly said Thursday that it was opposed to escalating trade tensions. The comments appeared to soothe investor concerns at a time when many are worried about the possibility of a global recession.
Trade bellwethers Boeing and Caterpillar rose at least 1% each in the premarket. Micron Technology gained 2%.
On Wednesday, the rate on the benchmark 30-year Treasury bond sank to an all-time low, while the U.S. yield curve inverted even further.
The closely-watched spread between the 10-year Treasury yield and the 2-year rate briefly fell to negative 6 basis points in the previous session. The move extended losses from earlier in the week, when the spread registered its lowest level since 2007.
A 10-year rate below the 2-year yield is viewed by fixed income traders as an important recession prognosticator, marking an unusual phenomenon as bondholders receive better compensation in the short term.
On the data front, the latest weekly jobless claims, a second reading of second-quarter GDP (gross domestic product) and advance economic indicators for July are all scheduled to be released at 8:30 a.m.
Pending home sales for July will follow slightly later in the session.

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