By Mark DeCambre, MarketWatch , Joy Wiltermuth
Mnuchin says U.S. was '90% of the way there' on China trade
deal
U.S. stocks clawed back some of the previous day's loss in early
trade Wednesday as semiconductor shares scored a bounce from Micron
Technologies's late-Tuesday quarterly results.
Comments from U.S. Treasury Secretary Steven Mnuchin suggesting
that a Sino-American trade deal wasn't far from complete, also
trigger some modest buying on Wall Street.
The Dow Jones Industrial Average was up 47 points, or 0.2%, to
26,595, those for the S&P 500 ) advanced 4 points, or 0.15%, at
2,921, while the Nasdaq Composite Index climbed 55 points, or 0.7%,
to 7,940.
Mnuchin told CNBC
(https://www.cnbc.com/2019/06/26/mnuchin-says-us-china-trade-deal-is-90-percent-complete.html)
that Beijing and Washington are nearing a deal on tariffs. "We were
about 90% of the way there (with a deal) and I think there's a path
to complete this," he told the financial network in Bahrain.
The U.S. Treasury Secretary said he was "hopeful" that a deal
could be struck as the market awaits a sideline conversation
between President Donald Trump and Chinese President Xi Jinping at
the Group of 20 gathering in Osaka, Japan, which kicks off on
Friday.
Separately, President Trump, appearing on Fox Business on
Wednesday said that he was happy to collect China tariffs
(http://www.marketwatch.com/story/trump-today-president-threatens-tariffs-on-china-as-he-jokes-draghi-should-lead-fed-2019-06-26)
if talks broke down.
Concerns about escalating trade tensions between the China and
the U.S., the world's largest economies, have fed a sense of rising
uncertainty about the health of the global economy, at least partly
contributing to central banks across the world signaling a
willingness to reinstitute a fresh wave of economic stimulus.
"Certainly, when we came in pre-open, futures were higher on the
Mnuchin comments," said Sahak Manuelian, an equities trader at
Wedbush Securities.
"It seems things are starting to fall off a bit."
On Tuesday, equity markets suffered one of the worst declines in
about a month, led by a selloff in trade-sensitive informational
technology shares, after the S&P 500 index last week saw a new
record high. Even with yesterday's slide, the Dow Jones Industrial
Average stands about 1% shy of its Oct. 3 record, while the
tech-heavy Nasdaq Composite Index is within reach of its May 3
all-time closing high, despite giving up 121 points, or 1.5%, in
the prior session.
Tuesday's slump came as Federal Reserve Chairman Jerome Powell,
speaking at the Council on Foreign Relations in New York, signaled
that an interest-rate cut in July is not a done deal, emphasizing
that the central bank was still monitoring the economy and
"grappling" with signs of weakness to avoid a knee-jerk reaction as
it considers dialing back benchmark rates.
What's more, St. Louis Fed President James Bullard said he
wasn't advocating for a too-aggressive cut of 50 basis point to key
federal-funds futures rates when the Fed meets next month.
Wall Street currently has the odds of an interest rate cut in
July at 100%, according to the CME Group's FedWatch tool.
Read: Fed's Bullard says he is not in favor of half point rate
cut in July
(http://www.marketwatch.com/story/feds-bullard-says-he-is-not-in-favor-of-half-point-rate-cut-in-july-2019-06-25)
Check out: Powell says the Fed is 'grappling' with whether to
cut interest rates
(http://www.marketwatch.com/story/powell-says-the-fed-is-grappling-with-whether-to-cut-interest-rates-2019-06-25)
"Positioning ahead of the G20 summit meeting between Trump and
Xi could see investors want skin in the game ahead of what many
feel could yield a very positive outcome," said Edward Moya, senior
market analyst at brokerage Oanda, in a daily research note.
"A reset of talks is likely becoming the base case scenario and
if we see a timeline put in place, we could see equities resume the
march towards uncharted territory," he said.
There was more bad economic data on Wednesday, with
durable-goods orders for May dropping 1.3%, weighed down by Boeing
Co.'s (BA) woes from its grounded 737 MAX jets.
Check out: Durable-goods orders drop 1.3% in May, but business
investment picks up in reassuring sign
(http://www.marketwatch.com/story/durable-goods-orders-drop-13-in-may-but-business-investment-picks-up-in-reassuring-sign-2019-06-26)
A separate report on international trade in goods also showed
the U.S. trade deficit climbed 5.1% for the same month, which was
wider than expected.
Read: U.S. trade deficit in goods widens 5.1% to $74.5 billion
in May
(http://www.marketwatch.com/story/us-trade-deficit-in-goods-jumps-51-to-745-billion-in-may-2019-06-26)
Market participants may also be partly watching the White House
after reports indicated that Special counsel Robert Mueller will
testify
(http://www.marketwatch.com/story/robert-mueller-to-testify-before-house-panels-on-july-17-2019-06-25)before
the House Judiciary and Intelligence committees on July 17.
Democrats have been wanting to hear from Mueller personally,
regarding his investigation into Russian interference in the 2016
election as well as possible obstruction of justice by President
Donald Trump.
Which stocks are in focus?
Shares of Apple Inc.(AAPL) were in focus after the iPhone maker
and tech giant acquired autonomous-driving startup Drive.ai
(http://www.marketwatch.com/story/apple-buys-autonomous-car-startup-driveai-reports-2019-06-25),
according to multiple reports. Apple confirmed the deal to both
Axios and the San Francisco Chronicle
(https://www.sfchronicle.com/business/article/Drive-ai-a-self-driving-car-startup-once-worth-14047625.php).
Shares of Apple were up more than 2% in early action Wednesday.
Micron Technology Inc. shares (MU) rose 12% in early trade
Wednesday after the memory-chip maker's results topped lowered
expectations
(http://www.marketwatch.com/story/micron-stock-surges-after-hours-as-earnings-top-lowered-expectations-2019-06-25)
for the quarter, and executives forecast improvement in the fourth
quarter even though actual numbers were shy of expectations.
That was good news for other semiconductor companies. Shares of
Advanced Mico Devices(AMD) climbed 4%; Nvidia Corp. 5% and shares
of exchange-traded semiconductor fund iShares PHLX Semiconductor
ETF (SOXX) climbed 1.8%.
Shares of Boeing (BA) were up 1% in early action Wednesday.
(END) Dow Jones Newswires
June 26, 2019 10:40 ET (14:40 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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