Stock market set to carve out fresh records to start Christmas week trade - MarketWatch

Dow futures headed for a third straight gain, and stocks looked poised for fresh records to start a holiday-abbreviated week, as investors focused on a report that China will cut import tariffs for frozen pork, pharmaceuticals and some high-tech components starting from Jan. 1.

Check out: Here’s when markets will be closed for Christmas and the New Year

How are benchmarks performing?

Futures for the Dow Jones Industrial Average YMH20, +0.25%  rose 62 points, or 0.2%, at 28,546, those for the S&P 500 index ESH20, +0.14%  advanced 7.80 points, or 0.2%, at 3,233.50, while Nasdaq-100 futures NQH20, +0.23%  climbed 31.25 points, or 0.4%, at 8,741.75.

Last week, the Dow DJIA, +0.28% booked a 1.1% weekly gain, the S&P 500 index SPX, +0.49% returned 1.7% over the period, while the Nasdaq Composite Index COMP, +0.42% climbed 2.2%, marking its largest weekly gain since Aug. 30., according to FactSet data.

All three benchmarks produced a second consecutive weekly advance and a trio of all-time closing highs.

Year-to-date the Dow is up 21.98%, the S&P 500 up 28.55 and the Nasdaq up 34.51%, as of Friday’s close.

What’s driving the market?

Wall Street’s main stock indexes were tipping modestly higher as the U.S. and China attempt to show signs of cementing a partial trade agreement that could set the stage for a more improved business climate in 2020.

Thus far, China’s cabinet has agreed to lower tariffs for all trading partners on more than 859 types of products to below the rates that most-favored nations enjoy, the Finance Ministry said Monday, according to the Wall Street Journal.

The Journal reported that the lowered import duties will apply to frozen pork, as China aims to shore up its meat supplies amid an outbreak of swine fever. Tariffs on some of the products will go to zero.

Bloomberg News es timates that the total imports impacted could be $389 billion, or about 18% of China’s total imports, based on 2018 import data.

The move is the latest in a sign that Beijing and Washington are near completing a partial trade agreement that would achieve a lasting detente in a tariff conflict that has persisted for almost two years and has impeded global and domestic economic expansion, economists say.

“The move by China appears to be partly driven by a domestic shortage, and partly by a desire to build bridges with the US,” David Madden, market analyst at CMC Markets wrote in a Monday note to clients.

“Either way it is a step in the right direction for the trading relationship of the two largest economies in the world. As it is Christmas week, market volatility is low, and trading ranges are small, so it is possible today’s movements are not a true reflection of market sentiment,” the CMC analysts wrote.

Trade for Monday kicks off a shortened week of action, with Tuesday representing a half-day session and most global markets closed on Wednesday for Christmas.

Investors were parsing data on orders for long-lasting goods in November, which fell 2%, the largest decline since May, driven by a 72.7% decline in orders for defense aircraft and parts. Economists polled by MarketWatch expected a 1% increase. Orders for core capital-expenditure goods, a key measure of business investment, rose 0.1%.

The Commerce Department will issue a report on new-home sales for November at 10 a. m. Eastern Time.

What stocks are in focus?

Shares of Apache Corp. APA, -0.40%  rallied 7.3% in premarket action, after the oil-and gas explorer announced an agreement with French company Total SA FP, +0.10%  to acquire a 50% working interest in Block 58 of the offshore Guyana-Suriname basin.

Aurora Cannabis Inc. ACB, -0.88%  announced over the weekend that Chief Corporate Officer Cam Battley has left the company. Shares were down 2.2% in premarket trade.

Online gambling company DraftKings Inc. said Monday it will become a public company via an acquisition of Diamond Eagle Acquisition Corp. DEAC, -0.10%  and SBTech, a gaming technologies firm. The deal is expected to close in the first half of 2020, when the combined company will trade under a new symbol, listed on the Nasdaq. Diamond Eagle shares rose 5.2% before the start of Monday.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.14%  edged one basis point lower to 1.902%.

Oil prices were slightly higher; West Texas Intermediate Crude for February delivery CLG20, -0.15%  ticked up 20 cents, or less than 0.1% at $60.47 a barrel. Gold prices were also edging higher, with the price of an ounce of gold GCG20, +0.34%  rising $5, or 0.3%, to $1485.80.

The U.S. dollar DXY, +0.03% was edging higher relative to a basket of its rivals, with the ICE Dollar index, a measure of the buck against a half-zone rival currencies, edging 0.8% higher.

In Asia overnight, stocks closed mixed; with the China CSI 300 000300, -1.25%  losing 1.3%, Japan’s Nikkei 225 NIK, +0.02%  gaining less than 0.1% and Hong Kong’s Hang Seng HSI, +0.13%  rising 0.1%.

European stocks were also trading mixed Monday, with the Stoxx Europe 600 SXXP, -0.05%  up less than 0.1%.

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https://www.marketwatch.com/story/stock-market-set-to-carve-out-fresh-records-to-start-christmas-week-trade-2019-12-23

2019-12-23 13:56:00Z
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