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Stocks Extend Gains as US Lawmakers Reach Deal to Avoid Government Shutdown

Stocks Extend Gains As US Lawmakers Reach Deal To Avoid Government Shutdown paragraph is one concerning that Finance, Forex groups, published during our reporter Erick Emerson upon February 12, 2019, that section can search just as that tags Avoid, deal, extend, Gains, government, lawmakers, Reach, shutdown, Stocks. We are happy to joyful you also providing that anothers paper concerning finance along with we always updating this section everyday.

The Tuesday Market Minute

  • Global stocks trade firmly higher as investors cheer positive signals from U.S.-China trade talks and a tentative deal to avoid a second U.S. government shutdown.
  • European stocks book solid gains as the euro drifts to a two-and-a-half month low against the U.S. dollar, which is on it longest winning streak in three years.
  • Global oil prices edge higher, but remain range-bound amid the offsetting influence of record U.S. production, OPEC cuts and slowing global growth.
  • U.S. equity futures suggest a triple digit gain for the Dow ahead of earnings from Activision Blizzard, Under Armour and Molson Coors.

Market Snapshot

Global stocks extended gains Tuesday as investors reacted to preliminary agreement between rival U.S. lawmakers that would prevent another government shutdown later this week and cheered the positive signals from trade talks between Washington and Beijing.

Republican Senator Richard Shelby told reporters late Monday that a tentative deal had been reached with Democratic lawmakers to fund the U.S. government through the current financial year, which ends in September, but noted that it did not included the $5.7 billion for border wall funding demanded by President Donald Trump.

Trump made a passing reference to the deal last night during a rally in El Paso, but appeared to shrug off the lack of funding for his signature 2016 campaign promise, telling the supportive crowd “we’ll build the wall anyway”.

He also said he didn’t want China to have a “hard time”, in reference to ongoing trade talks between Washington and Beijing, while one of his close political allies, Kellyanne Conway, told the Fox News Channel that a meeting with China President Xi Jingping was still possible before the March 2 deadline for the talks to be completed.

The positive signals on both issues helped shares in Asia book solid gains, led by Japan’s Nikkei 225, where traders returned from a Foundation Day holiday to a weaken yen, which helped the benchmark surge 2.6% by the close of trading to 20,864.21 points. The region-wide MSCI ex-Japan index, meanwhile, was marked 0.3% higher heading into the close of trading.

U.S. equity futures were also on the march, with contracts tied to the Dow Jones Industrial Average indicating a 114-point opening bell gain while those linked to the S&P 500 were suggesting a 14 point advance for the broader benchmark.

The U.S. earnings calendar is relatively light Tuesday, although key reports are expected from video game maker Activision Blizzard (ATVI) as well as Molson Coors Brewing (TAP) , Occidental (OXY) and Under Armour (UAA) .

S&P 500 earnings are likely to contract by 0.2% in the first quarter of this year, Refiintiv estimates, compared to a 26.5% growth rate over the same period last year, before rebounding only modestly to 3.6%. The weakness has raised the prospect of a so-called earnings recession — where profits decline for two consecutive quarters — over the first half of this year, the first such move since 2016.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, touched a three-month high of 97.128 in overnight trading before paring gains into the early European session, sending the euro to its lowest levels in at least two-and-a-half months as investors searched for higher-yielding assets in markets around the world.

The dollar, paradoxically, has risen some 2% against its peers since the Federal Reserve softened its stance on rate hikes earlier this year, as 10-year risk-free government yields offer between 2.5% and 2.7% more than similar paper issued in Germany or Japan.

European stocks started the Tuesday session firmly, as well, with the Stoxx 600 rising 0.6% in the opening minutes of trading in Frankfurt, led by bank and financial sector shares, while Germany’s DAX performance, which is acutely sensitive to global trade signals, rose more than 1% in Frankfurt.

Global oil prices inched higher in early European trading, as well, but have largely remained range-bound for the past month as traders balance the impact of record U.S. production against weaker economic fundamentals, OPEC production cuts and sanctions on the sale of Venezuelan crude. 

Despite the recent trading range, which has kept Brent between $59 and $62.75 per barrel, oil market direction has largest led U.S. equity markets for much of the past two months. 

Brent crude contracts for April delivery, the global benchmark, were marked 36 cents higher from their Monday close in New York and changing hands at $61.87 per barrel while WTI contracts for March delivery — which closed at the lowest level in two weeks yesterday — were seen 28 cents higher at $52.69 per barrel.

 

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