Despite what could be seen as a significant escalation in trade tensions between China and the US with Beijing banning the sale of select Apple products, the Dow Jones managed to recover from significant losses during yesterday’s session and close out the day just a shade higher. Optimism over the economy was upbeat in light of another bumper JOLT job openings figure, whilst the idea that the Federal Reserve may not hike interest rates next week is also starting to find itself being priced in.
US equities seem unaffected by political risk, too. The idea that Donald Trump could be impeached continues to circulate but it’s failing to drag on stocks, although with only limited US economic data due for release in the day ahead, again there’s the potential for sentiment to turn negative, especially if we see no progress with the trade situation. A call between senior US and Chinese politicians reportedly did take place yesterday in a bid to map out next steps here, although with the hard deadline still almost three months away, if the idea is to use brinksmanship then there’s still some waiting to be done.
Ahead of the open we’re calling the DOW up 7 at 24,430 and the S&P down 2 at 2636.
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