U.S. Stocks Set for Small Opening Gains as Trump Signals Trade Progress

04/05/2019 | 06:24am

By Will Horner

U.S. stocks were set to open higher Friday after President Trump struck an upbeat tone about the U.S.-China trade talks but failed to set a date for a final summit with Chinese leader Xi Jinping.

Futures for the Dow Jones Industrial Average and the S&P 500 were 0.1% higher, ahead of a release of U.S. labor-market data later in the day.

Tesla shares were likely to be in focus after a federal judge called on CEO Elon Musk and the U.S. government to reach a compromise on their dispute over Mr. Musk's use of social media. Shares in the company were 0.8% higher in premarket trading.

European gains were muted, with the pan-continental Stoxx Europe 600 inching up 0.1% in midday trade.

After a meeting with China's Vice Premier Liu He in the Oval Office on Thursday, Mr. Trump was optimistic about the latest round of trade negotiations, saying that both sides aimed to strike a deal in the next four weeks.

Investors were anticipating that Mr. Trump would set a date for a summit with China's President Xi Jinping, signaling a resolution to the long running issue, but such an announcement wasn't forthcoming.

While the trade dispute has been at the forefront of investors' concerns lately, markets had mostly priced in a positive outcome from the talks, said Geoffrey Yu, head of the U.K. Investment Office at UBS Wealth Management.

"There hasn't been a single headline where things could have been said to have moved in the wrong direction, so how much additional upside is there?" he said. "We can't see anything at the moment which could derail progress so markets will take that at the very least as a non-negative."

In Europe, the German DAX index lagged behind other regional indexes as positive data on the nation's industrial production failed to allay investors' concerns about its economy.

Germany's Federal Statistical Office said Friday that total industrial output rose 0.7% in February from the previous month, after data Thursday showed a slump in orders for the nation's manufacturing sector, offering a mixed picture of the country's economy.

The yield on the German government 10-year bond rose to 0.011%. Bond yields rise as prices fall.

Greece's Athex Composite index rose 1.3% after Eurozone governments approved the release of funds to the country after deciding Athens' had enacted enough economic overhauls to receive the money.

Concerns about signs of slowing growth across the world have weighed on investors this year, with data from China and Europe pointing to slowdowns and increasing the focus on U.S. economic data. A key question for investors has been whether the soft patches across the global economy indicated a path toward stabilization or further deterioration.

And while the U.S.-China trade dispute appeared to be easing, the emergence of other trade disputes was likely as the U.S. trade deficit remained largely unchanged and governments across the world were increasingly turning against globalization, said Stefan Hofrichter, chief economist at AllianzGI

"There will be these kind of disruptions to international trade going forward, I think that is just the world we have to live with," he said.

Elsewhere, markets in Asia turned in a mixed performance, with a number of major indexes closed for holidays. Japan's Nikkei closed up 0.3%, while Australia's ASX 200 finished its trading day down 0.8%. Stock markets in Hong Kong, mainland China and Taiwan were closed.

In currencies, the British pound was flat after U.K. Prime Minister Theresa May wrote to the European Union to request a delay to Brexit until June 30. Sterling was largely unchanged at $1.3070, while the WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was also flat.

The yield on the benchmark 10-year Treasury note rose to 2.537% from 2.512% Thursday afternoon.

Oil prices moved lower with Brent, the global benchmark, falling 0.4% to $69.13 a barrel. Gold prices also slipped by 0.4% to $1,288.95 a troy ounce.

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