Nov 12, 2019

US Market | Futures Indicator Update: US stock futures edge higher as investors await Trump trade speech

Fred Imbert, Silvia Amaro

U.S. stock index futures were slightly higher on Tuesday as investors awaited a speech from President Donald Trump on trade and economic policy.
Around 7 a.m. ET, Dow Jones Industrial Average futures were up 10 points, indicating a gain of just 11 points at the open. S&P 500 and Nasdaq 100 futures also pointed to marginal gains.
Trump will be speaking at the Economic Club of New York later in the day where he could give clues to the status of trade talks between the U.S. and China. His speech comes amid some concerns regarding plans to sign a trade deal in the coming weeks.
President Donald Trump said Friday that he had not agreed to scrap tariffs on Chinese goods after reports earlier last week said both sides had agreed to cancel existing tariffs in phases. Last month, Trump said China and the U.S. agreed to a phase one trade deal to be signed later in November.
Recent optimism around U.S.-China trade helped stocks reach record highs. The Dow and S&P 500 are both up more than 3% over the past month while the Nasdaq has risen 5.8% in that time.
But Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, thinks a lot of the positive news around a phase one deal have been baked in.
“The stocks most exposed to the China trade war are back to prior peaks – and pre-trade war/1Q18 levels – in terms of both performance and valuation,” Calvasina said in a note. “With [earnings] reporting season winding down, a positive outcome on a China trade deal baked in, 2020 forecasts still in need of downward adjustment, and companies making it clear that 2020 guidance isn’t going to come anytime soon, positive catalysts between now and year-end are difficult to imagine.”
Instability in Hong Kong is also on investors’ radar. Hong Kong’s main index, the Hang Seng, rose fractionally Tuesday. This, after dropping 2.5% on Monday amid further protests.
The Dow eked out a record close as Boeing shares jumped, but the S&P 500 snapped a three-day winning streak. 

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