Wall St. takes a breather with all eyes on Fed meeting

By Shreyashi Sanyal

(Reuters) – Wall Street’s main indexes took a pause on Wednesday, after a rally the previous day, as investors held back from making big bets ahead of the Federal Reserve’s policy statement that is expected to lay the groundwork for future interest rate cuts.

Markets have climbed this month, with the S&P 500 index gaining 6% so far and 1% away from its all-time high hit in early May, fueled by hopes of a rate cut.

The Fed’s statement and new economic projections are scheduled to be released at 2 p.m. ET (1800 GMT), providing investors an opportunity to gauge the impact of a prolonged U.S.-China trade conflict, President Donald Trump’s demands for a rate cut and softer-than-expected economic data on monetary policy thinking.

The U.S. central bank will likely leave rates unchanged but the market is factoring in a cut as soon as next month. Fed Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET (1830 GMT).

“I think the potential for the Fed to disappoint today is significantly higher than the market expects,” said Yousef Abbasi, global market strategist at INTL FCStone Financial Inc in New York.

“The Fed has already told us that it’s ready to act but with the metrics we’ve seen in the economy – yes, they’re mixed, but they’re still growing – it just becomes very difficult for someone to say we absolutely need a rate cut.”

U.S. Treasury yields rose on Wednesday, tracking the European market, after steep falls the previous day, as investors rebalanced positions ahead of the Fed decision.

The financial sector gained 0.40%, with bank stocks rising by 0.15%.

At 11:18 a.m. ET, the Dow Jones Industrial Average was up 39.27 points, or 0.15%, at 26,504.81 and the S&P 500 was down 0.23 points, or 0.01%, at 2,917.52.

The Nasdaq Composite was down 3.74 points, or 0.05%, at 7,950.15.

The healthcare sector rose 0.44%, the most among the 11 major S&P sectors, helped by gains in UnitedHealth Group Inc, Pfizer Inc and Allergan Plc.

Allergan climbed 4.03% after the drugmaker said its constipation drug, jointly developed with Ironwood Pharmaceuticals Inc, improved symptoms of bloating, pain and discomfort in patients suffering from irritable bowel syndrome with constipation.

Adobe Inc jumped 4.43% after the Photoshop software provider beat analysts’ estimates for quarterly profit and revenue.

Advancing issues outnumbered decliners by a 1.10-to-1 ratio on the NYSE and by a 1.30-to-1 ratio on the Nasdaq.

The S&P index recorded 15 new 52-week highs and one new low, while the Nasdaq recorded 35 new highs and 43 new lows.

(Reporting by Shreyashi Sanyal and Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila)

White House’s Hassett says progress in China trade talks-Fox Business

FILE PHOTO: Trump economic adviser Kevin Hassett gestures as he speaks during a news briefing at the White House in Washington, U.S., September 10, 2018. REUTERS/Kevin Lamarque

WASHINGTON (Reuters) – White House economic adviser Kevin Hassett said on Monday that U.S. Trade Representative Robert Lighthizer has made progress in talks with China and a deal was possible to end a dispute that has already put tariffs on hundreds of billions of dollars worth of goods.

“I think that it looks like Ambassador Lighthizer has made a lot of progress, and we might get there on China,” Hassett said in an interview with Fox Business Network.

World markets were buoyed on Monday by investors’ optimism that a trade deal could be cemented as soon as this month to resolve the ongoing trade war between the world’s two largest economies.

“I think everybody’s hopeful, as the markets are, that this is going to get to the finish line sometime soon,” Hassett told Fox, adding that details of any deal are still being worked out.

On Sunday, U.S. President Donald Trump said on Twitter that trade talks were progressing well and that he had asked China to immediately remove all tariffs on U.S. agricultural products while delaying his own plan to impose 25 percent tariffs on Chinese goods.

A summit between Trump and his Chinese counterpart Xi Jinping could occur around March 27 to finalize a deal, the Wall Street Journal reported on Sunday, citing a source briefed on negotiations.

A representative for the White House said they had no comment on the ongoing negotiations.

(Reporting by Doina Chiacu, Susan Heavey and Steve Holland; Editing by Chizu Nomiyama and Jeffrey Benkoe)

Trump-Xi meet, a turning point in global trade war?

FILE PHOTOS: Republican presidential nominee Donald Trump (L) holds a rally with supporters in Council Bluffs, Iowa, September 28, 2016 and Chinese President Xi Jinping waits for leaders to arrive at a summit in Shanghai May 21, 2014. REUTERS/Jonathan Ernst/Aly Song/File Photos

By Philip Blenkinsop

BRUSSELS (Reuters) – Will U.S. President Donald Trump’s much-heralded meeting with Chinese counterpart Xi Jinping in Argentina on Saturday lead to an easing of the Sino-U.S. trade conflict?

That has been the main question of financial and commodity markets leading up to the G20 summit in Buenos Aires. The answer is likely to steer investors at the start of the coming week.

Signals leading up to the meeting were at best mixed.

“I think we’re very close to doing something with China, but I don’t know that I want to do it,” Trump said as he set out on his journey from the White House.

The state-run China Daily newspaper said any deal was unlikely to be a comprehensive solution to the impasse due to “diverging demands and agendas”.

Economists at UBS expressed hope that a positive message could at least emerge, with a path towards resolution sometime next year, but that recent U.S. actions and statements had tempered their optimism.

ING was downbeat on a breakthrough coming soon, adding that two sides remained far apart on the extent to which China’s trade surplus with the United States could be reduced.

ING Bank forecasts that global trade growth will slow from 2.6 percent this year to 1.3 percent in 2019, the weakest rate since 2009, when the global financial crisis was at its height.

The estimate is based on an intensified U.S.-China trade war in which Washington increases tariffs on $200 billion of products to 25 percent in January from 10 percent now and then targets the $267 billion of Chinese exports not already subject to measures.

Without that, global trade growth could be unchanged at 2.6 percent. However, if Trump also decides to hike import duties on cars, that growth would slump to 0.5 percent next year, ING says.

Trump has threatened for months to impose auto tariffs, notably those made in Europe, although he has pledged to refrain from doing so for the European Union and Japan as long as it makes constructive progress in trade talks with the pair.

However, Trump reignited speculation on Wednesday by saying new auto tariffs were “being studied” and asserting they could prevent jobs cuts such as the layoffs and plant closures announced by General Motors Co.

Economists at Citi believe any tariffs would apply to finished vehicles but not to auto parts and the principal question is not if, but when, they will be unveiled.

As speculation has intensified, top executives from German carmakers Volkswagen, BMW and Daimler, previous targets of Trump’s criticism, are set to visit the White House next week.

OPEC CUTS, U.S. JOBS SPIKE?

Once markets have absorbed the fruits of the Trump-Xi exchange, investors may shift focus to at least two events at the end of the week.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies meet on Dec. 6-7 and are expected to discuss a possible production cut. Oil prices have fallen by more than 20 percent in November, to make it the biggest monthly drop in a decade.

The United States will also report its widely watched monthly jobs report on Friday.

Economists polled by Reuters forecast that the unemployment rate will hold at a 49-year low of 3.7 percent and that year-on-year wage growth will also match the 3.1 percent of October, itself a nine-and-a-half-year high.

The figures, if confirmed, should make it a near-certainty that the Federal Reserve will raise interest rates for a fourth time this year at its Dec. 18-19 meeting, even as its chairman Jerome Powell signals a more cautious approach on future rate hikes next year.

“While sentiment may be a bit gloomy after the fallout from G20 meeting the more positive tone to the U.S. macro story could improve spirits as we move through the week,” said James Knightley, chief international economist at ING.

(Reporting by Philip Blenkinsop; Editing by Richard Balmforth)

More than 3,000 Vietnamese fell victim to human traffickers in 2012-2017

FILE PHOTO - A woman walks along a dirt road during a misty day in Sapa, northwest Vietnam, May 23, 2011. REUTERS/Carlos Barria

By Khanh Vu

HANOI (Reuters) – More than 3,000 people in Vietnam, most of them women and children, were trafficked between 2012 and 2017, many of them into China, the Ministry of Public Security said on Friday, as parliament sought to tighten laws to tackle the problem.

Human traffickers took people from markets and schools, and used Facebook and a Vietnamese messaging app to befriend victims before selling them to karaoke bars, restaurants or smuggling them abroad, the ministry said in a statement.

Seventy-five percent of cases involved people being smuggled across the border into China, the ministry said.

“Human trafficking has been taking place across the country, not just in remote and mountainous areas,” Le Thi Nga, head of the National Assembly’s justice department, told a hearing on the problem on Thursday.

The National Assembly is reviewing its anti-human trafficking law, introduced in 2012.

Nga said enforcement of the law had faced “difficulties and shortcomings” and urged legislators to introduce more comprehensive guidelines.

The Ministry of Public Security said police had launched investigations into 1,021 human trafficking cases and arrested 2,035 people in the 2012-2017 period.

A total of 3,090 people had been victims of human trafficking during that time, the ministry said, of whom 90 percent were women and children from ethnic minorities living in remote, mountainous areas.

Vietnam should “reduce poverty, eradicate illiteracy, provide vocational training and create jobs for people – especially for the ethnic minorities”, to help address the problem, the ministry said.

(Reporting by Khanh Vu; Editing by James Pearson)

Wall Street opens higher, Dow rises to record high

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 20, 2017.

By Sweta Singh and Ankur Banerjee

(Reuters) – U.S. stock indexes opened higher on Monday, with the Dow hitting a record high, as investors remained optimistic on corporate earnings in the second quarter.

Investors have been counting on earnings to support the relatively high valuations for equities, with the S&P 500 trading at about 18 times earnings estimates for the next 12 months, above its long-term average of 15 times.

Of the 289 S&P 500 companies that reported results until Friday, 73 percent of them beat analyst expectations. This is above the 71 percent average over the past four quarters, according to Thomson Reuters.

The S&P 500 slipped on Friday on negative reactions to earnings reports from high-profile names such as Amazon, Exxon and Starbucks and a drop in shares of tobacco companies.

“We had a choppy week last week, we had a very erratic week, so coming off a erratic week, we’re getting some early morning premarket bargain hunting,” said Andre Bakhos, managing director at Janlyn Capital LLC.

“We’re not having anything coming that the markets can sink their teeth into.”

Apple Inc, a part of the Dow, is expected to report quarterly results after market close on Tuesday and its performance may hold the sway over tech stocks this week.

At 9:37 a.m. ET (1337 GMT) the Dow Jones Industrial Average was up 61.07 points, or 0.28 percent, at 21,891.38, the S&P 500 .SPX was up 4.68 points, or 0.19 percent, at 2,476.78 and the Nasdaq Composite was up 18.28 points, or 0.29 percent, at 6,392.96.

Seven of the 11 major S&P sectors were higher, with the financial index’s 0.38 percent rise leading the gainers.

On data front, contracts to buy previously owned homes rebounded in June after three straight monthly declines.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed last month, jumped 1.5 percent to a reading of 110.2.

The Federal Reserve of Dallas will release its monthly manufacturing index for July at around 10:30 a.m. ET.

Oil prices rose on Monday, putting July was on track to become the strongest month for the commodity this year.

Scripps Network was up 1.23 percent at $87.98 premarket after Discovery Communications said it would buy the media company for $14.6 billion.

Charter Communications Inc shares were up 4.3 percent at $386.13 after the U.S. cable operator said on Sunday it was not interested in buying wireless carrier Sprint Corp.

Shares of Snap Inc fell 4.1 percent to $13.10 and hit a record low, as a share lockup ended, allowing for sales by early investors and pushing it further below its March initial public offering price.

Advancing issues outnumbered decliners on the New York Stock Exchange by 1,495 to 1,017. On the Nasdaq, 1,278 issues rose and 971 fell.

 

(Reporting by Ankur Banerjee, Sweta Singh, and Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

 

Dow hits record high as markets ride on Trump win

Traders work on the floor of the New York Stock Exchange (NYSE) the day after the U.S. presidential election in New York City,

By Yashaswini Swamynathan

(Reuters) – The Dow Jones industrial average hit a record intraday high on Thursday as investors bet that President-elect Donald Trump would lead a shift away from austerity policies.

Investors are seeing Trump’s policies such higher defense and infrastructure spending, tax cuts and deregulation of banks and as being more business-friendly than Democrat Hillary Clinton’s position of maintaining status quo.

“The markets are adjusting to a new reality and are giving Trump the benefit of doubt,” said Adam Sarhan, chief executive officer of Sarhan Capital.

“He does have some problems with immigration and with social issues, but his economic policies, at least in the short-term, are perceived to be stimulative and net good for the economy and that’s why stocks are rallying.”

The dollar jumped to a more than two-week high of 98.92, while gold turned flat as investors returned to riskier assets such as stocks.

The Mexican peso continued its downward momentum against the dollar as Trump’s policies are considered deeply negative for the country.

At 9:43 a.m. ET (1343 GMT) the Dow Jones industrial average was up 161.69 points, or 0.87 percent, at 18,751.38.

The S&P 500 was up 17.11 points, or 0.79 percent, at 2,180.37. The index is less than 20 points shy of its record intraday high.

The Nasdaq Composite index was up 45.40 points, or 0.86 percent, at 5,296.47.

Financial and healthcare stocks rose, continuing to hold their positions as the top performers among the 11 major S&P 500 sectors in the post-Trump victory rally.

Consumer staples, utilities and real-estate – the defensive parts of the market – remained the big losers.

As investors decipher what a Trump presidency would mean to the financial markets, St. Louis Federal Reserve President James Bullard repeated his call that a single interest rate increase would be adequate for the foreseeable future.

Macy’s rose 6.4 percent to $40.85 after the department store operator raised its full-year sales forecast and announced a partnership to monetize some of its real-estate assets.

Shares of drugmakers such as Merck, Celgene and Gilead rose on Trump’s victory and after California voters turned down a ballot initiative aimed at reining in rising prices for prescription drugs.

IBM provided the biggest boost to the S&P and the Dow, rising 2.7 percent to $159.02 after Bank of America Merrill Lynch upgraded the technology services provider’s stock and raised its price target.

Walt Disney and Nordstrom are expected to report earnings after market closes.

Advancing issues outnumbered decliners on the NYSE by 1,725 to 1,049. On the Nasdaq, 1,756 issues rose and 648 fell.

The S&P 500 index showed 70 new 52-week highs and three new lows, while the Nasdaq recorded 221 new highs and 14 new lows.

(Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty)