Wall Street nears record high on trade, earnings optimism

(Reuters) – U.S. stock indexes rose to near all-time high on Monday on optimism about the imminent signing of a preliminary U.S.-China trade deal as well as the start of the fourth-quarter corporate earnings season.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 13, 2020. REUTERS/Brendan McDermid

Apple Inc (AAPL.O), Facebook Inc (FB.O), Netflix Inc (NFLX.O) and Microsoft Corp (MSFT.O) were the top boosts to the S&P 500 and Nasdaq. Chipmaker Nvidia Corp (NVDA.O) rose 2.6% after bullish brokerage comments.

Google-owner Alphabet Inc (GOOGL.O) rose 0.5% and was set to cross $1 trillion in market capitalization to join Apple and Microsoft.

An easing of Middle East tensions and signs that the Phase 1 U.S.-China trade agreement, which is expected to be signed in Washington on Wednesday, have encouraged of riskier bets over the last week.

Adding to the positive mood around trade, Bloomberg reported the Trump administration planned to lift its designation of China as a currency manipulator, according to people familiar with the matter.

The other major centerpiece this week will be earnings from the big banks, JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N), as they kick off the fourth-quarter reporting season from Tuesday.

“It’s one of those days when we’re setting up for that shift from macro to micro,” said Art Hogan, chief market strategist at National Securities in New York.

“My guess is that it (bank earnings) is going to be more good news than bad news and a lot of that is driven by the kick up in demand across the board whether it’s demand from consumers or corporates.”

Analysts expect profits at S&P 500 companies to drop 0.6% for a second straight quarterly decline, according to Refinitiv IBES data.

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