In a topsy-turvy week, Friday’s premarket trading session hasn’t unimpressed traders. The talk of the market is trade and believe it or not, investors are still excited by 1 word: tariffs. This has sent the stock market today into a whirlwind rally as index futures are pointing to a higher open for the final trading day of the week.
China Trade Talks Resume
Though this really isn’t “new” news, the mere mention of this event seems to keep markets on edge. It wasn’t that long ago that we already knew talks would resume in January and yet, here we are and the markets are eating it up.
Delegation from the US will visit Beijing on Monday to discuss trade. There’s a key deadline in March could put hefty taxes on China if a deal is not struck by then. Echoing the sentiment that this “event” seems like a borrowed script from the movie, “Groundhog Day,” Chris Beauchamp, chief market analyst at IG Group Holdings PLC says, “They get people all excited and it can lead to some warm statement. But we’ve been here before and it’s really is one of those cases where there’s hope for a dawn, and there’s no real development.”
Fed Chair Jerome Powell Speaks at 10:15 AM ET
Investors are hoping for a dovish response from Fed Chair Jerome Powell in the stock market today. “We look for Powell to soften his tone and indicate…that the Fed will be flexible in adjusting their economic and rate outlook in the face of changing economic and financial conditions without pledging to pause for a defined period of time,” said Kathy Bostjancic, head of U.S. financial market economics at Oxford Economics, on Thursday.
Investors will be looking for a hopeful outlook from the central banker following recent market volatility. The jury is still out on this one based on the fact that the economic outlook appears bright, which would support rising rates as planned. However, the situation of higher rates and higher corporate debt has some skittish about the outlook of the market in general.
Stock Market Today Expecting Strong Jobs Numbers
One hour before the opening bell the stock market is expecting to see another round of strong jobs figures. Being that this is the first Friday of the month, the Bureau of Labor Statistics will deliver the final read for December at 8:30 AM ET. This will be a critical signal to the economy and labor market.
The U.S. is expected to have added 184,000 in December. This would be up from the 155,000 jobs added in November, according to economists polled by Bloomberg. Furthermore, the unemployment rate is expected to be unchanged from 3.7%. That figure just so happens to also be the lowest rate in nearly 50 years with average hourly earnings expected to have grown at a 0.3% rate.
“The December employment report should provide significant reassurance that the economy is holding up far better than market participants currently perceive,” wrote Stephen Stanley, chief economist at Amherst Pierpont Securities.
More China News In Stock Market Today
Remember when there was doom and gloom earlier this week about China’s factory activity and how it declined for the first time in over a year and a half? The markets got thwarted with bearish selling. But, in line with the usual forgetfulness of the recent stock market, everything’s A-OK now as it would appear.
Here’s what was said:
The IHS Markit China Composite Purchasing Managers Index (PMI), produced in conjunction with the Caixin Insight Group, rose to 52.2 in December in seasonally adjusted terms. This apparently left it at the highest level in five months.
As a frame of reference, anything over 50 signals that activity levels are improving while a reading below suggests they’re deteriorating. The distance away from 50 indicates how quickly activity levels are expanding or contracting.
“The improved headline index reading was supported by higher activity levels across both the manufacturing and service sectors,” IHS Markit said. “Services companies registered a solid rate of activity growth, while manufacturing output expanded slightly after two months of stagnation.”
The PMI measures changes in activity across China’s manufacturing and non-manufacturing sectors from one month to the next.