US market: Trading optimism warmed quotes

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 23, 2018. REUTERS/Brendan McDermid

UNITED STATES (VOP TODAY NEWS) — A new round of trade negotiations between the United States and China starts today. The parties are optimistic, although certain problems remain. Chinese macro statistics also added a positive to the global markets.

US stock futures are rising at a premarket against the background of positive expectations for trade negotiations. On Tuesday, key indices closed in a multidirectional format. S & P 500 is in the area of ​​resistance 2870-2880 points.

On the pullback, the nearest support is 2820 points. It is likely that in the medium term, the US stock market will update historic highs.

Positive factors

Trade negotiations.A new round of talks in Washington starts on Wednesday. Judging by the statements of officials, the parties are full of optimism.

According to The Financial Times, most of the controversial issues were resolved during the previous rounds, but differences remain regarding the mechanisms for implementing the agreement.

In addition, there is no agreement on the immediate abolition of import duties on Chinese goods introduced last year. Earlier, Donald Trump said that the cancellation of fees may not occur immediately, but after the appearance of confidence in the terms of the agreement.

Chinese macro statistics.Official business activity index for March showed signs of recovery in the economy.

Today came the “private” PMI from Caixin in the service sector. The index recovered to a 14-month high. The value was 54.4 points against 51.1 points in February. An important role was played by the reduction of VAT, as well as measures of monetary policy.

The monetary policy of the Fed. According to the derivatives segment (CME FedWatch service), the probability of reducing the key rate by the end of the year is about 60%. Macrodata generally confirms the Fed’s cautious attitude.

According to a report from ADP, employment in the private sector in March increased by 129 thousand (forecast: 184 thousand).

On Friday, the official report on the labor market for the same month will be published. Judging by the data from ADP, non-farm payrolls may be worse than analysts’ consensus forecast (180 thousand).

The risks of Brexit

The process of leaving the UK from the EU may begin on April 12. British lawmakers are ready to insist on postponing the deadlines. It is quite possible that Brussels will make concessions, because an uncontrolled Brexit without a deal could have adverse consequences for the entire European economy.

This article is written and prepared by our foreign editors writing for VOP from different countries around the world – edited and published by VOP staff in our newsroom.

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