June 15, 2021

Futures near record high ahead of trade agreement, earnings

2 min read

The expected signing of a trade deal between the United States and China kept U.S. stock futures near record levels on Monday, while investors looked forward to the start of the fourth-quarter earnings season.

Traders work on the floor at the NYSE in New York
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 10, 2020. REUTERS/Brendan McDermid

REUTERS: The expected signing of a trade deal between the United States and China kept U.S. stock futures near record levels on Monday, while investors looked forward to the start of the fourth-quarter earnings season.

An easing of Middle East tensions and signs that the Phase 1 U.S.-China trade agreement will be inked powered Wall Street to record highs last week, despite an underwhelming December jobs report. The two sides are set to sign the agreement in Washington on Wednesday.

The other major center piece this week will be earnings from big banks JPMorgan Chase & Co , Morgan Stanley , Goldman Sachs Group Inc and Wells Fargo & Co as they kick off the fourth-quarter reporting season from Tuesday.

Analysts expect profits at S&P 500 companies to drop 0.6per cent in a second straight quarterly decline, partly down to a strong quarter a year ago and also to the drag from energy and industrials, which have borne the brunt of the trade war.

At 07:28 a.m. ET, Dow e-minis were up 84 points, or 0.29per cent. S&P 500 e-minis were up 9.5 points, or 0.29per cent and Nasdaq 100 e-minis were up 36.75 points, or 0.41per cent.

Tesla Inc and Nio Inc gained 2per cent and 4.3per cent, respectively, after a report said China would not make significant cuts to subsidies for new energy vehicles (NEV) this year.

Oppenheimer also its raised its price target on Tesla to US$612 from US$385.

Semiconductor stocks including Nvidia Corp , NXP Semiconductors and Western Digital Corp rose between 0.6per cent and 1.4per cent on positive brokerage actions heading into earnings.

Apparel retailer Lululemon Athletica Inc rose 2.5per cent after the company raised its quarterly sales and profit outlook, boosted by strong holiday season demand.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty)