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Stock-index futures pointed higher Monday, with the upbeat tone tied to a preliminary U.S.-China trade deal, though questions remained over the details of the long-awaited “phase one” accord.
What are major indexes doing?
Futures on the Dow Jones Industrial Average YMH20, +0.20% rose 52 points, or 0.2%, to 28,217, while S&P 500 futures ESH20, +0.45% were up 11.55 points, or 0.4%, to 3,186.75. Nasdaq-100 futures NQH20, +0.52% gained 36 points, or 0.4%, to trade at 8,557.
Stocks capped a winning week Friday with small gains. The Dow Jones Industrial Average DJIA, +0.01% saw a 0.4% weekly advance to end at 28,135.38, while the S&P 500 SPX, +0.01% saw 0.7% rise to end 3,168.80. The Nasdaq Composite COMP, +0.20% logged 0.9% weekly rise, ending at 8,734.88.
What’s driving the market?
Friday’s gains came after President Donald Trump and Chinese officials announced a so-called phase one trade pact that included a partial rollback of some tariffs and the scrapping of further U.S. duties on Chinese imports that were due to take effect on Sunday, while Beijing promised targeted agricultural purchases.
U.S. Trade Representative Robert Lighthizer on Sunday told CBS that the phase one China deal was “totally done.” He said the deal goes beyond agriculture to address intellectual property issues, has strong enforcement provisions and addresses financial services and currency issues. A number of contentious issues remain to be resolved in further “phase two” talks, which have yet to be scheduled. The deal is expected to be signed in January, he said.
Read: China says it will put off tariff hike on U.S. autos, other goods following trade deal
“The most important thing that happened with the phase-one deal was that we have moved from a one-year long period of escalation to de-escalation,” said Allan von Mehren, analyst at Danske Bank, in a note. But a lack of detail could serve to temper investor enthusiasm, he said.
It’s “unusual” to announced a deal before it has been completed with all legal text that both sides have agreed to, von Mehren said. The lack of text adds to the sense that the announcement of the pact was “not coordinated.”
The U.S. economic calendar is bare on Monday, but the flow of data picks up later in the week. Highlights include the November consumer-price index on Tuesday, the producer-price index on Thursday, and November retail sales on Friday.
See: The locomotive of the U.S. economy might be losing steam
What companies are in focus?
Shares of Dow component Boeing Co. BA, -1.33% were off 3% in premarket action Monday. The Wall Street Journal reported the plane maker is considering either halting or further cutting production of the 737 Max aircraft amid growing uncertainty over the troubled airplane’s return to service.
Shares of PG&E Corp. PCG, -4.10% fell 22% in premarket trade after California Gov. Gavin Newsom demanded changes to the utility’s plan to pay wildfire victims and exit bankruptcy.
