The roller coaster ride is set to continue on Wall Street today, with US index futures suggesting a sharp jump at the open off the back of apparent progress in terms of a trade deal between China and the USA.
Presidents of the respective countries met over the weekend at the G20 summit in Argentina and whilst this discussion was supposed to be little more than a sideshow, by all accounts it turned into the main event.
The US has committed no further tariff increases for 90 days whilst China has agreed to a string of purchases from across the Pacific. This good news spreads far beyond ties between Washington and Beijing however – it’s served up a slug of risk appetite which has in turn depressed the US dollar too, adding further upside for stocks.
We have the usual round of new-month data set for release in the hours ahead, but given the boost served up by presidential chat over the weekend, the direction looks unassailable even if the data should disappoint at a granular level. It still seems too early to consider bear market threats a thing of the past, however. This is simply the opening salvo and on its own will do nothing to keep Chinese manufacturing from dipping into contraction.
Ahead of the open we’re calling the Dow up 482 at 26,020 and the S&P up 48 at 2808.