U.S. stock futures set for higher start as trade talks kick off, China equities rise – MarketWatch

U.S. stock indexes looked poised to rise on Monday as a round of U.S.-China tariff negotiations in Beijing commenced and as another partial government shutdown loomed.

How are major indexes faring?

Dow Jones Industrial Average futures YMH9, +0.31%  rose 115 points, or 0.5%, to 25,196, while S&P 500 futures ESH9, +0.39%  climbed 12.20 points, or 0.5%, to 2,718.50. Nasdaq-100 futures NQH9, +0.65%  rose 41.50 points, or 0.6%, to 6,958.75.

On Friday, the Dow DJIA, +0.14% fell 63.20 points, or 0.3%, to 25,106.33, adding 0.2% for the week. The S&P 500 index SPX, +0.20% rose 1.83 points to 2,707.88 and the Nasdaq Composite Index COMP, +0.29%  gained 9.85 points, or 0.1%, to 7,298.20.

The Dow extended its winning streak for a seventh week, while the S&P 500 and Nasdaq also logged gains.

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What’s driving the market?

The latest round of trade talks set to begin Monday between the U.S. and China, with lower level discussions to start off the week, and Treasury Secretary Steven Mnuchin and trade representative Robert Lighthizer arriving Thursday and Friday for discussions.

Even if tariffs on China goods remain at 10%, as some have reported, the lingering uncertainty around a trade resolution would only highlight that a 12-month long negotiation between the world’s largest economies has failed to result in any deal.

That could further unsettle investors and U.S. corporations alike who are looking at a 12:01 a.m. Eastern Time March 2 deadline for an agreement to be struck between the two countries. The U.K., meanwhile, is spiraling toward a March 29 scheduled exit from the European Union with or without a trade agreement in hand.

As well, investors are bracing for another potential government shutdown after talks broke down between the main parties’ negotiators on Sunday over whether to limit the number of migrants authorities can detain. The White House hasn’t ruled out another shutdown if a border security compromise can’t be reached by midnight Friday.

There are no economic data releases schedule for Monday.

Read: Why stock-market traders are already bracing for a make-or-break month in March

Which stocks are worth watching?

Restaurant Brands International Inc. QSR, +3.92% stock is up 2.1% in premarket action, after the parent company of Burger King reported profit and same-store sales growth above Wall Street expectations.

Shares of Electronic Arts Inc. EA, +7.78% are up 2.7% in heavy premarket volume, as the stock builds on Friday’s momentum, when it rose 16.1.% on news that the company’s Apex Legends game logged more than 10 million players in its first 72 hours.

What are the analysts saying?

“A lot of the good news out there is already priced into stocks at these levels,” wrote Tom Essaye, president of the Sevens Report, in a Monday note to clients. “At 2,700 or higher, the S&P 500 isn’t priced for perfections, but it is priced for positive resolution of numerous events,” including the U.S.-China trade spat, a stabilization of global economic growth, and the Fed declining to raise rates at all in 2019, he said.

“It’s not that good things aren’t possible, it’s that a lot of them are now assumed by the S&P 500 at 2700 or higher, and that creates not much reward and more risk,” Essaye wrote.

How are other markets trading?

In Asia, the Shanghai Composite returned from a week of holidays to close up nearly 1.4%, while the Nikkei 225 NIK, -2.01% was closed for a holiday. Stocks in Europe were higher across the board with the Stoxx Europe 600 SXXP, +0.81% up 0.9%.

Crude oil CLH9, -2.12% was under pressure, while gold GCH9, -0.81% also fell as the U.S. dollar DXY, +0.33% rose against its peers.

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