The Friday Market Minute
- Global stocks extend gains on fresh U.S.-China trade deal hopes, pushing markets back near multi-year highs.
- White House economic adviser Larry Kudlow says "good progress" has been made in ending the sixteen month trade dispute, but offers little detail in terms of how key issues will be bridged.
- A.P. Moller-Maersk, the world's biggest container shipper, sees improving 2020 traffic growth as trade picks up modestly and global manufacturing rebounds.
- US equity futures suggest modest opening bell declines on Wall Street that could take all three benchmarks t fresh record highs ahead of October retail sales data at 8:30 am Eastern Time.
Wall Street looks poised to test another series of fresh record highs Friday as global investors react to bullish comments on U.S.-China trade talks from a key White House adviser and continue to push equities higher in major markets around the world.
President Donald Trump's most influential economic adviser, Larry Kudlow, told an event at the Council on Foreign Relations in Washington Thursday that the world's two largest economies have made "very good progress" amid "constructive talks" aimed at ending their sixteen month trade dispute.
"We're getting close," Kudlow said. "The mood music is pretty good, and that has not always been so in these things."
Kudlow's assessment, while not contradicting the views of the President or senior Chinese officials expressed this week, is nonetheless more optimistic and helped boost global stocks, particularly in Asia, in the early Friday session as investors continue to ride the bullish wave of low central bank interest rates, tame inflation, solid corporate profits and relatively stable commodity prices.
House Speaker Nancy Pelosi's remarks Thursday that suggested U.S. lawmakers were "moving positively" towards ratifying a new U.S.-Canada-Mexico trade agreement added to the optimistic Friday market tone.
Wall Street futures suggest a similar reaction at the start of trading Friday, with contracts tied to the Dow Jones Industrial Average indicating a 90 point gain that would lift the average to a fresh all-time high, while those linked to the S&P 500, which has gained 23.5% so far this year, are guiding to a 10 point opening bell gain for the broader benchmark.
Global stocks were also supported by stronger-than-expected quarterly earnings from A.P. Moller-Maersk (AMKBY) , the world's biggest container shipper, and its bullish 2020 outlook which sees a modest pick-up in global traffic as demand improves and manufacturing rebounds.
European stocks were also off to a solid start Friday, with the Stoxx 600, the region's broadest benchmark of equity prices, rising 0.36% in the opening hour of trading in Frankfurt on the back of gains from basic resource and technology stocks.
However, Britain's FTSE 100 fell 0.4% by mid-day trading in London, pulling the Stoxx to just a 0.05% gain, as big-name telecom stocks such as BT Group Plc (BT) tumbled following a campaign pledge from the Labour Party to provide free broadband for every business and household in the country.
Overnight in Asia, Japan's Nikkei 225 traded back near its recent 13-month high following a 0.7% session gain that took the benchmark to 23,303.32 points while the region-wide Asia ex-Japan index was seen 0.51% higher heading into the final hours of trading.
Global oil prices were little-changed from Thursday's closing levels at the start of the European session, with traders citing data from the Energy Department yesterday that indicated a 2.2 million buildup in domestic crude inventories and record high production rates of 12.8 million barrels per day from U.S. drillers that offset the impact of OPEC signalling the extension of its output cuts when the cartel meets early next month in Vienna.
Brent crude contracts for January delivery, the global benchmark, were seen 35 cents lower from their Thursday close and trading at $61.93 per barrel, while WTI contracts for December were marked 10 cents lower at $56.67 per barrel.