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Top 5 Things to Know in the Market on Tuesday

Investing.com - Here are the top five things you need to know in financial markets on Tuesday, Jan. 8: 1. Focus

Investing.com - Here are the top five things you need to know in financial markets on Tuesday, Jan. 8:

1. Focus on U.S.-Sino trade as talks wrap up

Tuesday marked the second and final day in a round of trade discussions between the U.S. and China being held in Beijing, with optimism on an amicable outcome buoying global risk assets.

“There’s a very good chance that we’ll get a reasonable settlement that China can live with, that we can live with, and that addresses all the key issues,” Commerce Secretary Wilbur Ross told CNBC on Monday.

China approved five genetically modified (GM) crops for import on Tuesday, in an apparent show of good faith during the last day of trade talks. The U.S. is the world’s largest producer of GM crops.

“It's a goodwill gesture towards the resolution of the trade issue,” a China representative of a U.S. agricultural industry association told Reuters on Tuesday.

Washington and Beijing have until March 1 to make a deal, after which U.S. President Donald Trump has pledged to ramp up tariffs to 25%, from 10%, on $200 billion worth of Chinese imports.

“The talks are still underway and I believe we will release a detailed readout after they are concluded,” Lu Kang, spokesperson for China’s Foreign Ministry, announced on Tuesday, although no specific time was given.

2. Global stocks supported by trade hopes despite Samsung warning

Hopes that the U.S. and China may be moving closer to ending their prolonged trade spat supported global stocks on Tuesday.

Although optimism appeared to reign among stocks, an unexpected profit-warning from South Korea’s Samsung Electronic (KS:005930) limited gains. The company estimated a 29% drop in quarterly profit due to weak demand for chips, bringing to mind last week’s dim outlook from U.S. tech giant Apple (NASDAQ:AAPL). South Korea’s KOSPI closed with a 0.6% decline amid mixed trade in Asia.

European shares were able to buck the disappointing news and the broad pan-European STOXX 600 gained around 1%

U.S. futures also pointed to a bullish open. At 5:52 AM ET (10:52 GMT), the blue-chip Dow futures rose 142 points, or 0.60%, S&P 500 futures rose 15 points, or 0.59%, while the Nasdaq 100 futures traded up 38 points, or 0.58%.

3. Trump set to speak on border ‘crisis’

U.S. President Donald Trump announced that he will deliver an address about the “crisis” on the southern border with Mexico at 9:00 PM ET (3:00 GMT Wednesday).

The U.S. government remains under partial shutdown as Trump grapples with Congress over funding for the border wall. Talks to fund the government have broken down over the president’s insistence for $5.7 billion in funding, leaving several government agencies shuttered and some 800,000 government workers furloughed or working without pay.

All the major U.S. television networks agreed to air Trump's speech, prompting Democrats, who say a wall would be expensive, inefficient and immoral, to seek equal time.

4. U.S. Dollar regains ground ahead of more labor data

The greenback recovered some of its prior losses as the U.S. and China wrap up a two-day trade meeting and investors awaited further data on the American labor market.

At 6:07 AM ET (11:07 GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.22% at 95.43.

The main economic data on Tuesday will be the Job Openings and Labor Turnover Survey (JOLTs) numbers for November.

The report will be released at 10 AM ET (15:00 GMT).

Economists forecast that job openings will slip slightly to 7.063 million.

But the numbers are from two months ago, so may not have a large impact on the markets, especially coming after last week's very strong gain in December nonfarm payrolls reported Friday.

5. Oil prices rise ahead of U.S. inventories

Oil prices pressed higher on Tuesday, with West Texas Intermediate on track for its longest winning streak since 2017, as investors turned their attention to weekly data on U.S. crude inventories.

U.S. crude oil futures rose 75 cents, or 1.55%, to $49.27 by 6:08 AM ET (12:08 GMT), while Brent oil traded up 98 cents, or 1.71%, to $58.31.

Buying sentiment was supported by optimism that the U.S. and China could make progress in their trade negotiations while hopes that production cuts from OPEC+ would help rebalance markets.

The API’s weekly crude stockpiles report will come out at 4:30 PM ET (21:30 GMT), to be followed on Wednesday by the official government data. Analysts expect a draw of 3.3 million barrels.

Read more: Oil’s Evolving Crisis: Is China To Blame? - Barani Krishnan

-Reuters contributed to this report.