U.S. Stocks May See Initial Strength On Chinese Comments About Trade War
(RTTNews) - After turning higher over the course of the previous session, stocks are likely to see some further upside in early trading on Thursday. The major index futures are currently pointing to a higher open for the markets, with the Dow futures up by 280 points.
Early buying interest may be generated amid indications China is seeking to de-escalate the trade war with the U.S.
Chinese Ministry of Commerce spokesman Gao Feng indicated that China does not currently intend to retaliate against President Donald Trump's latest threat to raise the rate of tariffs on Chinese imports.
"We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with calm attitude," Gao said, according to a CNBC translation.
Gao claimed China has plenty of countermeasures it could impose but will instead focus on removing Trump's new tariffs, which were announced after China said it plans to impose tariffs on $75 billion worth of U.S. goods.
"The most important thing at the moment is to create necessary conditions for both sides to continue negotiations," Gao told reporters during a weekly briefing.
On the U.S. economic front, the Labor Department released a report showing a modest increase in first-time claims for U.S. unemployment benefits in the week ended August 24th.
The report said initial jobless claims inched up to 215,000, an increase of 4,000 from the previous week's revised level of 211,000.
Economists had expected jobless claims to climb to 215,000 from the 209,000 originally reported for the previous week.
A separate report released by the Commerce Department showed the pace of growth in U.S. economic activity slowed by slightly more than initially estimated in the second quarter.
The Commerce Department said gross domestic product increased by 2.0 percent in the second quarter compared to the previously reported 2.1 percent growth. The downward revision came in line with economist estimates.
The downwardly revised GDP growth seen in the second quarter compares to the 3.1 percent jump in GDP reported for the first quarter.
Shortly after the start of trading, the National Association of Realtors is due to release its report on pending home sales in the month of July. Pending home sales are expected to come in unchanged in July after jumping by 2.8 percent in June.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
After coming under pressure early in the session, stocks showed a significant turnaround over the course of the trading day on Wednesday. The rebound reflected a reversal from Tuesday, when stocks turned lower after seeing initial strength.
The major averages all climbed firmly into positive territory, with the Dow outperforming its counterparts. While the Dow jumped 258.20 points or 1 percent to 26,036.10, the Nasdaq rose 29.94 points or 0.4 percent to 7,856.88 and the S&P 500 climbed 18.78 points or 0.7 percent to 2,887.94.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Thursday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both edged down by 0.1 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.
Meanwhile, the major European markets have all moved sharply higher on the day. While the French CAC 40 Index has surged up by 1.3 percent, the U.K.'s FTSE 100 Index is up by 1.1 percent and the German DAX Index is up by 1 percent.
In commodities trading, crude oil futures are rising $0.48 to $56.26 a barrel after climbing $0.85 to $55.78 a barrel on Wednesday. Meanwhile, an ounce of gold is trading at $1,549.20, up $0.10 compared to the previous session's close of $1,549.10. On Wednesday, gold fell $2.70.
On the currency front, the U.S. dollar is trading at 106.22 yen compared to the 106.12 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is unchanged compared to yesterday's $1.1078.