Wall Street posted some solid gains during yesterday’s session and the positive sentiment looks set to continue, backed by some renewed optimism that a trade deal with China may yet be secured.
Reports of further high level talks have buoyed many equities, with tech stocks being amongst the most favoured, although there’s still the very real risk that if Donald Trump doesn’t like what he’s hearing from Beijing, the deal will collapse and fresh tariffs will be implemented.
Yesterday’s solid retail sales readings from January likely helped cement confidence in the market, but today’s inflation readings will take on added significance. These are expected to come in some way below the 2% target, but with rising wages, the Fed will need to act with caution here. However anything that indicates inflation is still slowing plays towards the idea that a prompt end to quantitative tightening may be necessary in a bid to shore up the economy. Any suggestion this will happen has the potential to provide index futures with another boost ahead of the open.
Boeing’s share price (NYSE:BA) will remain in focus in the wake of the tragic air crash over the weekend and the prospect of further regulatory intervention here. Yesterday’s 5% slide in the company’s stock took more than 150 points off the Dow, underlining the fallibility of this concentrated index to big moves in some of its largest cap stocks.
Ahead of the open we’re calling the Dow up 29 at 25680 and the S&P 500 up 6 at 2789.