Dow Set to Roar Into March on U.S.-China Trade Optimism

Reports indicate the U.S. and China are preparing to a potential trade agreement

by Patrick Martin

Published on Mar 1, 2019 at 9:21 AM
Updated on Mar 1, 2019 at 2:33 PM

Dow Jones Industrial Average (DJI) futures are signaling a strong start to March, last seen more than 170 points above fair value on fresh U.S.-China trade optimism. A Bloomberg report indicated officials from the two countries are preparing a trade agreement for President Donald Trump and Chinese President Xi Jinping to potentially sign by mid-March. Elsewhere, investors are digesting a 0.2% monthly rise in the December core personal consumption expenditures (PCE) index, while the reading was unchanged at 1.9% on a year-over-year basis. Plus, consumer spending fell 0.5% in December, its largest drop in nine years.

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

  • What Martha Stewart joining the CBD craze means for this penny stock
  • Cerner stock is headed for new lows, according Morgan Stanley. 
  • This heavily shorted biotech suffered big losses before earnings.  
  • Plus, Tesla sinks post-Musk announcement; Marriott drops on weak revenue; and more trouble for Karyopharm.

Stock Futures Chart March 1

Five Things You Need to Know Today

  1. The Chicago Board Options Exchange (CBOE) saw 1.1 million call contracts traded on Thursday, compared to 695,722 put contracts. The single-session equity put/call ratio jumped to 0.63, and the 21-day moving average remained at 0.60.
  2. Tesla Inc (NASDAQ:TSLA) is down 4% in electronic trading, after CEO Elon Musk announced a cheaper version of its Model 3 sedan, a shift to online sales only, and an expected loss the first quarter. Musk had teased a big announcement earlier this week on Twitter amid a busy stretch of headlines. TSLA is below its year-to-date breakeven level, and it appears the shares' 100-day moving average has emerged as short-term resistance.
  3. Marriott International Inc (NASDAQ:MAR) is down 1.2% ahead of the bell. The hotel chain reported fourth-quarter earnings above estimates, but revenue and 2019 profit guidance fell short of expectations. As of yesterday's close, MAR had added 25% off its Christmas Eve bottom near $100. Now, the stock is at risk of snapping its five-week winning streak. 
  4. The shares of Karyopharm Therapeutics Inc (NASDAQ:KPTI) are down in electronic trading, after J. P. Morgan Securities downgraded the biotech name to "neutral" from "overweight," while slashing its price target to $7 from $21. KPTI fell to a record low of $4.02 yesterday, and has shed 80% of its value in the last six months thanks to unfavorable Food and Drug Administration (FDA) rulings and negative earnings reactions.
  5. The economic schedule will feature Markit's services purchasing managers manfuacturing index (PMI), the Institute for Supply Management (ISM) manufacturing index, and the Baker-Hughes rig count. Atlanta Fed President Raphael Bostic will speak in the afternoon. Foot Locker (FL) will report earnings.

stock market news march 1

 

Asian, European Markets Up on Chinese Manufacturing Data

Asian markets closed higher today, led by a 1.8% surge for China's Shanghai Composite after index provider MSCI outlined plans to increase the weighting of mainland stocks in its global benchmarks to 20% from 5% by November. Meanwhile, the Caixin/Markit manufacturing purchasing managers index (PMI) arrived at 49.9 in February to mark the third straight month of contracting factory activity -- but the reading was an improvement from January's 48.3, and topped consensus estimates. Japan's Nikkei closed the day up 1%, while Hong Kong's Hang Seng gained 0.6%. South Korea's Kospi was closed for holiday.

European stocks are also on positive ground at midday, with auto stocks catching a lift from well-received Chinese manufacturing data. Plus, following upbeat earnings results from Italy's Moncler, Chief Operating Officer Roberto Eggs said on a conference call he's "very happy" about the luxury group's performance on the Chinese mainland in the early innings of 2019. Elsewhere in the region, traders are reacting to the biggest jump in Germany's retail sales since October 2016, and a big post-earnings rally from London-listed ad giant WPP. At last check, the German DAX is up 1.2%, France's CAC 40 is 0.7% higher, and London's FTSE 100 has gained 0.5%.

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