Dow Futures Rip Higher but China Deal Dangles on $375 Billion Bomb

Dow Jones Industrial Average (DJIA) futures ripped 70 points higher on Tuesday, pointing to another strong day on the stock market. Investor optimism remains high as Trump and Xi Jinping are expected to sign partial trade deal in November. But question marks remain over $375 billion existing tariffs and China’s commitment to buy US agriculture.

Dow Jones Industrial Average (DJIA) futures jumped higher on Tuesday morning, extending Monday’s record-breaking trading session. Global stock markets were propelled higher on hopes of Trump and Xi Jinping inking a partial trade deal within the month.

Reports from Chinese negotiators, however, aren’t so conclusive. According to a Financial Times report, China is pushing the Trump administration to remove the existing tariffs on $375 billion worth of Chinese exports “as soon as possible” before signing the phase one agreement.

“Officials in Beijing have demanded that Washington take a further step and retract some existing levies on Chinese goods… It is a step that has been resisted by Trump officials.”

Dow futures rocket 70 points higher

Dow futures contracts pumped 70 points higher at 5.04 am ET Tuesday. The US stock market looks poised to retest yesterday’s record highs.

Dow Jones Industrial Average (DJIA) futures jumped higher on Tuesday, potentially pointing to another record-breaking day on the stock market. Source: Yahoo Finance

S&P 500 futures and Nasdaq Composite futures were up 0.2% and 0.3% respectively. Bitcoin traded at $9,290.

Confusion over the US-China trade deal?

According to the FT report, China is demanding Trump rollback September’s 15% tariff on $125 billion goods. Negotiators also hope to reverse the earlier 25% tariff on $250 billion of goods including machinery and semiconductors.

However, the Trump administration is likely to want something from China in return. Stronger IP protection or larger US agriculture purchases, for example.


Read More Here...

Bookmark the permalink.