Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Opening Bell: U.S. Futures Tap Into Trade Optimism But Gold, Bonds Rise Too

Published 2019-09-12, 07:23 a/m
Updated 2020-09-02, 02:05 a/m

  • U.S. futures extend Wall Street rally as U.S. delays round of tariffs on Chinese goods
  • European shares reverse early gains ahead of ECB rate announcement
  • Gold, Treasurys also gain ground, revealing lingering cautiousness

Key Events

Futures on the S&P 500, Dow and NASDAQ 100 extended a Wall Street rally this morning, tuning into an improved trade outlook and expected dovishness by the European Central Bank. Incongruously, though, Treasurys and gold also gained ground, conveying an overall mood of cautious waiting.

This was also reflected in the STOXX 600 giving up its highest open since late July, to waver below neutral levels by late European morning. Early gains were spurred by further signs of U.S.-China trade de-escalation, after U.S. President Donald Trump said an upcoming round of tariff hikes on £250bn worth of Chinese imports will be delayed by two weeks. Trump's goodwill move comes after China pledged to buy more U.S. agricultural goods ahead of trade negotiations next month.

The pan-European index halted a third-day climb, after edging higher for seven sessions out of eleven since the Aug. 26 low, which had nudged it just 0.54% away from the July 4 peak.

Earlier, Asian indices got a boost from positive trade cues, with the exception of Hong Kong’s Hang Seng (-0.26%). The index was weighed down by Taiwan warnings against travel to Hong Kong and China, after Taiwan citizen Lee Meng-chu was detained by Chinese authorities on national security grounds for allegedly sharing a photo of armored vehicles near the border with Hong Kong. Meanwhile, the Hong Kong Exchange Group made a surprise $37bn takeover bid for the London Stock Exchange.

Global Financial Affairs

Dow Jones Daily Chart

On Wednesday, U.S. equities including large-cap shares on the Dow Jones (+0.85%) jumped, closing at the top of the session and near record highs, as momentum stocks were back in fashion.

President Donald Trump’s renewed calls on the Fed to cut interest rates to “zero or less” contributed to push value stocks back to the end of the line. Meanwhile, Apple's (NASDAQ:AAPL) unveiling of lower iPhones price tags and of an affordable TV streaming service helped the NASDAQ Composite (+1.06%) surge to the highest level since July, while the S&P 500 (+0.72%) closed above the 3,000 mark for the first time in six weeks.

UST 10-Year Daily Chart

Despite the surge in risk appetite, yields on 10-year Treasurys returned to declines as they neared the downtrend line since Apr. 17.

Up Ahead

Up Ahead

  • U.S. producer prices data for August is due on Wednesday and CPI figures are scheduled for Thursday.
  • U.S. producer prices data for August is due on Wednesday and CPI figures are scheduled for Thursday.
  • Market Moves

    Stocks

    Currencies

    Bonds

    • The yield on 10-year Treasurys slid one basis point to 1.72%.
    • The yield on 2-year Treasurys climbed less than one basis point to 1.68%.
    • Germany’s 10-year yield fell one basis point to -0.58%.
    • Britain’s 10-year yield lost one basis point to 0.632%.
    • Japan’s 10-year yield declined one basis point to -0.208%.

    Commodities

    • West Texas Intermediate crude increased 0.4% to $55.99 a barrel.
    • Iron ore gained 3.8% to $94.40 per metric ton.
    • Gold climbed 0.3% to $1,501.64 an ounce.

    Latest comments

    Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
    Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
    Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
    It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
    Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
    © 2007-2024 - Fusion Media Limited. All Rights Reserved.