Futures climb as U.S.-China trade talks resume

February 11, 2019

By Amy Caren Daniel

(Reuters) – U.S. stock index futures rose on Monday as the latest trade talks between the United States and China began in Beijing, while U.S. lawmakers attempted to hammer out a deal to avoid another government shutdown.

China struck an upbeat note on the talks and the Shanghai exchange rose 1 percent after a week-long Lunar New Year holiday, but a U.S. Navy mission through the disputed South China Sea weighed on sentiment.

The latest discussions come against the backdrop of last month’s negotiations ending without a deal and the top U.S. negotiator declaring that a lot more work needed to be done.

The S&P 500 ended last week flat, largely due to the trade uncertainty and worries of a global economic slowdown.

Still, the benchmark index is about 15 percent above its December lows, helped in part by a dovish Federal Reserve and largely upbeat earnings reports.

The fourth-quarter earnings season has entered its home stretch, with 71.5 percent of the S&P 500 companies that have reported results topping profit estimates, according to IBES data from Refinitiv.

But analysts’ estimates for first-quarter earnings for S&P companies have turned negative. They expect a decline of 0.1 percent from a year earlier, which would be the first quarterly profit fall for the group since 2016.

Among a clutch of major U.S. companies reporting this week include Coca-Cola Co, PepsiCo Inc and Nvidia Corp.

At 6:45 a.m. ET, Dow e-minis were up 64 points, or 0.26 percent. S&P 500 e-minis were up 6.75 points, or 0.25 percent and Nasdaq 100 e-minis were up 24 points, or 0.35 percent.

Talks on border security funding collapsed on Sunday after Democratic and Republican lawmakers clashed over immigrant detention policy, but a special negotiating panel is aiming to come to a deal by Monday.

Tesla Inc rose 2.7 percent premarket after brokerage Canaccord Genuity upgraded the stock, calling its electric vehicle penetration “underappreciated”.

Electronics Arts Inc gained 2.2 percent after Jefferies raised its price target on the shares of the video-game publisher after it signed up 10 million players within three days of the launch of a new game.

(Reporting by Amy Caren Daniel & Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)

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