Wall Street set for higher open as U.S.-China trade optimism returns


(Reuters) – Wall Street was set to open higher on Friday as latest comments from China and U.S. President Donald Trump lifted hopes of a trade deal after conflicting headlines this week knocked stock indexes off record highs.

U.S. stock index futures rose in volatile trading as Trump told Fox News that a trade deal with China is “potentially very close”. Beijing had said earlier it wanted to work out an initial agreement with Washington, following reports that a truce could be delayed to 2020.

Global shares have retreated from near-two year highs scaled in recent weeks on hopes of a resolution to the trade war that has dented business sentiment, curtailed investment and hurt economic growth. [MKTS/GLOB]

A report on Friday said a hedge fund founded by billionaire Ray Dalio has bet more than $1 billion that stock markets around the world will fall by March 2020.

The next date in the trade spat to watch is Dec. 15, when U.S. tariffs kick in on Chinese goods including holiday gift items such as electronics and Christmas decorations.

“It’s less likely the deal will be signed by the end of this year, but you may see the Dec. 15 tariffs postponed,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The benchmark S&P 500 index is on course to end the week with its first decline in seven, while the Nasdaq is eyeing its first weekly drop in eight. A largely better-than-expected corporate earnings season also contributed to the rally.

Investors now await U.S. manufacturing and services sector data, as well as a consumer sentiment survey by the University of Michigan to gauge the fallout of the dispute on the domestic economy, which has so far proven fairly resilient.

At 9:03 a.m. ET, Dow e-minis 1YMcv1 were up 55 points, or 0.2%. S&P 500 e-minis EScv1 were up 6.25 points, or 0.2% and Nasdaq 100 e-minis NQcv1 were up 20.75 points, or 0.25%.

Among stocks trading premarket, Nordstrom Inc (JWN.N) jumped 8.8% after the retailer raised its 2019 forecast and reported third-quarter profit above expectations.

Gap Inc (GPS.N) rose 3.2% after edging past lowered expectations for quarterly profit, and reiterated its plan to separate Old Navy.

However, shares of Tesla Inc (TSLA.O) dropped 4% after the automaker unveiled its electric pickup truck.

Reporting by Arjun Panchadar and Agamoni Ghosh in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel