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Top 5 Things to Know in the Market on Thursday

EconomyJun 27, 2019 06:14
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© Reuters. - Here are the top five things you need to know in financial markets on Thursday, June 27:

1. U.S.-China said to ‘tentatively agree’ on trade truce

Reports surfaced Thursday that Washington and Beijing have “tentatively agreed” on a truce in the ongoing trade conflict ahead of the G20 summit.

The South China Morning Post said that the agreement would put a hold on Trump’s pending round of additional tariffs on Chinese goods.

Trump suggested on Wednesday that a deal was possible, although he remained prepared to spread tariffs to all China’s imports to the U.S. The White House confirmed that Trump and Xi would have a bilateral meeting on Saturday morning in Japan.

In a separate tariff conflict, Trump tweeted that India’s tariff hike on U.S. goods was “unacceptable” and “must be withdrawn”. India took action after the U.S. refused to exempt it from new U.S. tariffs on steel and aluminum imports.

2. Global stocks rise on Sino-U.S. trade hopes

Global stocks moved higher across the board on Thursday as hopes for a potential truce in the U.S.-China trade conflict revived risk appetite.

U.S. futures pointed to a higher open after Wednesday’s mixed close. Dow futures gained 77 points, or 0.3%, by 5:36 AM ET (9:36 GMT), S&P 500 futures rose 13 points, or 0.5%, while Nasdaq 100 futures traded up 47 points, or 0.6%.

Elsewhere, the more optimistic outlook set European equities on track to break a four-day losing streak. The pan-European Stoxx 600 rose 0.3%.

In Asia, China’s Shanghai Composite ended 0.7% higher, while Japan’s Nikkei gained 1.2%.

3. Data and earnings may provide market direction

A major dump of U.S. data is due later that will add fresh fuel to the debate of whether, when and by much the Federal Reserve may cut interest rates this year.

Chairman Jerome Powell indicated earlier this week that the Fed is still in a “wait-and-see” mode.

The third estimate of first-quarter gross domestic product will be released at 8:30 AM ET (13:30 GMT) and is expected to show no change from the 3.1% reported earlier.

At the same time, weekly jobless claims will provide further information on the strength of the U.S. labor market, while May pending home sales at 10:00 AM ET (14:00 GMT), will shed light on the state of the housing market.

Outside of the States, Germany will report its latest inflation numbers at 8:00 AM ET (12:00 GMT). European Central Bank President Mario Draghi has said that further stimulus will be needed if inflation doesn't pick up. Earlier, Spain, the euro zone's fourth-largest economy, reported a surprising drop in inflation this month.

On the U.S. earnings front, a negative report from Rite Aid (NYSE:RAD) will contrast with better-than-expected numbers from KB Home (NYSE:KBH) in Thursday’s trading. Ahead of the opening bell, Walgreens Boots Alliance (NASDAQ:WBA) will be in focus, while Nike (NYSE:NKE) takes the spotlight after the close.

4. Boeing’s new setback to drag on Dow

Shares in Boeing (NYSE:BA) slid more than 1% in pre-market trade as the company suffered yet another setback with its grounded 737 MAX.

The U.S. Federal Aviation Administration identified late Wednesday a new risk that Boeing will have to fix before the model can return to service.

The FAA announcement makes it unlikely that Boeing will be able to conduct a certification test flight as planned on July 8. As such, the chance of it returning to service before Labor Day is receding.

5. Oil prices gives back some gains ahead of Russian-Saudi meeting

Oil prices headed lower, giving back some of the strong gains made on Wednesday, as a key meeting between Russian and Saudi leaders at the G20 approached. President Vladimir Putin and Crown Prince Mohammed Bin Salman will likely discuss oil output strategy, ahead of the July 1-2 meetings reviewing the current production cut agreement between OPEC and other major exporters.

U.S. crude oil futures fell 31 cents, or 0.5%, to $59.07 by 5:38 AM ET (9:38 GMT), while Brent oil traded down 39 cents, or 0.6%, to $65.30.

Oil prices surged more than 2% on Wednesday after weekly government data showed U.S. crude inventories fell by the largest amount since 2016.

Read more: 3 Oil Market Drivers Shaping The Global Demand Outlook For The Rest Of 2019 - Ellen Wald

Top 5 Things to Know in the Market on Thursday

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