Dow Futures Edge Lower, Global Stocks Mixed as Record 2019 Draws to a Close

U.S. stocks look set trim some of their strongest annual gain in more than two decades Tuesday as 2019 draws to a close amid hopes of a near-term signing of the phase one trade agreement between Washington and Beijing.
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The Tuesday Market Minute

  • Global stocks mixed on the final day of the trading year amid reports of a near-term signing of the phase one U.S.-China trade deal.
  • White House adviser Peter Navarro expects China delegation in Washington this week, but declines to confirm a report that invitations have been issued and accepted.
  • China PMI tops 50 mark for the second consecutive month, while new orders for export rise at the fastest pace in more than 18 months, as trade talks boost business sentiment.
  • Wall Street futures set for modest declines for both the Dow and the S&P 500 heading into the final trading day for 2019 with Redbook retail sales data at 8:55 Eastern time .

U.S. equity futures edged lower Tuesday as investors prepped for the last day of the trading year amid reports of a near-term signing of a phase one trade pace between Washington and Beijing.

White House trade adviser Peter Navvaro told Fox News Monday that the pact, which would trigger tariff rollbacks by the U.S. and increased agricultural purchase from China, could be signed as early as this week in Washington, but declined to confirm a South China Morning Post report that formal invitations had been issued and accepted.

The opacity surrounding the text of the deal, reached earlier this month after more than a year of negotiations and tit-for-tat tariffs, has kept some markets wary over the final days of the trading year, but with investors in the U.S. sitting on some of the strongest gains in more than two decades, profit-taking could clip pre-market gains in what is expected to be a quiet session prior to Wednesday's New Year's Day holiday.

Sentiment was further blunted by reports that group of Iraqi Shiite Muslims threw rocks and missiles at the gates of the U.S. embassy in Baghdad Tuesday before tearing down the main gate and entering the compound.

The protesters, thought to be supported by Iran-backed militia, were reacting to U.S. airstrikes earlier this week that killed 25 Kataib Hezbollah fighters following the death of a U.S. civilian contractor in Iraq last week.

Futures contracts tied to the Dow Jones Industrial Average suggest a 40 point dip for the 30-stock benchmark, which has gained 22% so far this year, while those linked to the S&P 500 -- the broadest measure of U.S. stocks -- indicate a 2.5 point pullback that would shave some of the index's 28.45% advance since the start of the year.

The U.S. dollar index slipped 0.4% against a basket of its global peers in overnight trading, to change hands at 96.36, and looks set to end 2019 with a 0.5% gain, the slimmest in at least six years. 

European stocks were mixed in mid-morning trade in London and Frankfurt, with a firmer pound pushing the export-focused FTSE 100 to a 0.55% session decline, clipping its year-to-date advance to 12.1%,  -- the best in three years -- and a stronger euro holding the regional Stoxx 600 benchmark to a 0.12% slip after hitting all-time highs earlier this month.

Overnight in Asia, stronger-than-expected PMI data from China showed the biggest gain for export orders since May of last year, helping lift domestic stocks to solid 0.37% gains for the session, but the weaker U.S. dollar kept regional bourses in the red, pulling the MSCI ex-Japan benchmark to a 0.43% decline heading into the close of trading. 

Japan's Nikkei 225 was closed today and will remain so for the balance of the week.

Global oil prices were little-changed in the overnight session, even as the U.S. dollar slipped 0.13%, although U.S. crude prices are one pace for a 35% year-to-date gain, the strongest since 2016, fueled by OPEC production cuts and improving trade relations with China.

Brent crude futures contracts for February delivery, the global benchmark, were seen 55 cents lower from their Monday close in New York and trading at $66.12 per barrel, while WTI contracts for the same month were marked 61 cents lower at $61.07 per barrel.