Dow Futures Up Over 400 Points on China Trade Optimism

Oil prices are soaring alongside stock futures in electronic trading

by Karee Venema

Published on Dec 3, 2018 at 9:14 AM

It's set to be a big day on Wall Street, as traders cheer an apparent breakthrough in trade relations between Washington and Beijing. Following a highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 summit over the weekend, reports indicate the leaders have agreed to a 90-day "ceasefire" on new tariffs. Additionally, Trump tweeted this morning, "China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%."

Against this backdrop, futures on the Dow Jones Industrial Average (DJIA), S&P 500 Index (SPX), and Nasdaq-100 Index (NDX) are soaring, set to build on last week's positive momentum. Oil prices are up, too, after Russia and Saudi Arabia signaled support for output cuts ahead of this week's Organization of the Petroleum Exporting Countries (OPEC) meeting, with January-dated crude futures 4.5% higher at $53.21 per barrel.

Continue reading for more on today's market, including: 

  • The best sector in December.
  • This drug stock just locked up its eighth straight win. 
  • Options bears bank on more trouble for Goldman Sachs stock.
  • Plus, auto stocks pop; M&A buzz in the cannabis sector; and a $5.1 billion deal in the drug space.

dow sp500 futures on december 3

5 Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 999,559 call contracts traded on Friday, compared to 526,506 put contracts. The single-session equity put/call ratio fell to 0.53, and the 21-day moving average slipped to 0.69.
  2. The auto sector is flying high on the tariff news, even though Trump did not indicate what the lowered tax would be. At last check, Ford Motor Company (NYSE:F) is up 2.9% in electronic trading, General Motors Company (NYSE:GM) is flirting with a 3.2% lead, and Tesla Inc (NASDAQ:TSLA) is 3.3% higher.
  3. CBD-infused drink maker New Age Beverages Corp (NASDAQ:NBEV) said it will buy Utah-based beverage firm Morinda for $85 million in cash and stock. After closing last week at $4.63, NBEV shares are trading up 15.6% in electronic trading -- set to open near levels not seen since a late-October bear gap.
  4. U.K.-based GlaxoSmithKline plc (NYSE:GSK) will buy Massachusetts cancer treatment specialist Tesaro Inc (NASDAQ:TSRO) for $5.1 billion in cash, or $75 per TSRO share. While GSK stock is down 6.9% in premarket trading, TSRO is up 59%, set to open near the per-share buyout price. Rival drug name Clovis Oncology Inc (NASDAQ:CLVS) is also poised for a big session, on track to open 26% higher out of the gate.
  5. The Institute for Supply Management (ISM) manufacturing index and Markit's services purchasing managers index (PMI) will both be released today, as well as construction spending data. New York Fed President John Williams, Fed Governor Lael Brainard, and Dallas Fed President Robert Kaplan will speak throughout the day. Ascena Retail (ASNA) and Finisar (FNSR) will report earnings.

stocks in the news premarket dec 3

Global Stocks Rally on U.S.-China Trade Talks

Asian markets finished confidently higher today, powered by the temporary truce brokered between Presidents Trump and Xi. China's Shanghai Composite finished up 2.6%, getting an additional boost from the Caixin PMI, which rose in November. Hong Kong's Hang Seng gained 2.6%, while Japan's Nikkei tacked on 1%. Lastly, South Korea's Kospi added 1.7%.

Over in Europe, stocks are getting the same lift from the trade progress between the U.S. and China. This has many of Europe's basic resource stocks, such as Glencore and Anglo American, jumping. The auto sector is also driving gains, thanks to easing tariff fears. At last check, London's FTSE 100 is up 1.7%. Elsewhere, the German DAX is leading the gainers with a 2.2% surge, while the French CAC 40 is 1% higher.

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