U.S. stock futures point to modest gains as trade concerns dominate

U.S. stock futures point to modest gains as trade concerns dominate

Jobless claims fall

U.S. stock-index futures are pointing to a flat start for Wall Street on Thursday, as investors continue to digest headlines surrounding the potential for a U.S.-China trade deal.

How are the benchmarks trading?

Dow Jones Industrial Average futures YMZ8, +0.64%  rose 46 points, or 0.1%, to 24,609, while S&P 500 index futures ESZ8, +0.61%  rose 6 points, or 0.2% to 2,685. Nasdaq-100 futures NQZ8, +0.93% were up 34 points, or 0.5% to 6,803.

On Wednesday, The Dow Jones Industrial Average DJIA, +0.65% rose 157.03 points, or 0.6%, to end at 24,527.27, while the S&P 500 index SPX, +0.47% advanced 14.29 points, or 0.5%, to 2,651.07. The Nasdaq Composite IndexCOMP, +0.40% climbed 66.48 points, or 1%, to 7,098.31.

What’s driving the market?

U.S.-China trade concerns will remain at fore of investor minds Thursday, as they continue to digest headlines from earlier in the week that suggested the Chinese were ready to make significant concessions to their industrial policy and reduce tariffs on imported autos, while President Trump indicated he would intervene in the arrest of Huawei’s chief financial officer Meng Wanzhou if it would help ensure a trade deal with China.

On Thursday, reports that China has stopped requiring local governments to work toward its “Made in China 2025” strategy have added support to the thesis that China is willing to slow its push to strengthen its high-tech industry at the expense of foreign rival firms.

Traders are also focused on Thursday’s jobless claims data, which showed a significant decline in the number of Americans newly applying for unemployment benefits. The statistic, which is a leading indicator for labor markets and the economy, had been rising in recent months, albeit from historic lows.

Investors are also beginning to consider the tail risks associated with special counsel Robert Mueller’s investigation of the Trump administration. S&P 500 futures dipped Wednesday evening, after reports that the National Enquirer’s parent company, privately held American Media Inc. had agreed to tell prosecutors everything it knows about President Trump.

What data are in focus

The Labor Department announced Thursday morning that initial jobless claims fell in the week ended Dec. 8 by 27,000 to 206,000, easing fears that layoffs have been steadily rising.

The government also announced that U.S. import prices fell 1.6% in November, their largest decline in three years, led by the falling cost of oil.

What stocks are in focus?

Shares of General Electric Co. GE, +10.35% are in focus Thursday, after announcing the firm would launch a $1.2 billion industrial “internet-of-things” company, and after JP Morgan separately upgraded the stock from underweight to neutral. The stock is up more than 13% in premarket action.

Aflac Inc. AFL, +4.93% stock is up 4.7% in premarket trade Thursday, after the insurer confirmed it is in talks with Japan Post Holdings Co. Ltd. to take a minority stake.

Shares of Delta Air Lines Inc. DAL, -3.91% are trading down 1.2% before the bell Thursday, after the firm announced 2019 earnings guidance of between $6 and $7 per share, versus the consensus of $6.70, per FactSet.

How are other markets trading?

Stock markets in Asia rose broadly Thursday, with Hong Kong’s Hang Seng Index HSI, +1.29% Japan’s Nikkei NIK, +0.99% and the Shanghai Composite Index SHCOMP, +1.23% all ending the day higher.

In Europe, stocks are mixed as investors digest news of the end of the European Central Bank’s bond buying program, and as uncertainty around Brexit continues to weigh on sentiment. The Stoxx Europe 600 SXXP, +0.19% was trading flat, while the FTSE 100 UKX, +0.20% was down 0.2%.

Crude oil CLF9, +0.68% prices are falling Thursday, while Gold GCG9, -0.22% was down 0.4% and the U.S. dollar was virtually unchanged.

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