Dow futures gain extend gains as investors ride optimism of partial U.S.-China trade accord

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U.S. stock-index futures were gaining on Thursday, putting equity benchmarks in position to extent gains further on the heels of the signing of a formal trade truce between the U.S. and China, completed at a White House signing ceremony on Wednesday.

Investors are now bracing for a batch of economic reports including those on retail sales and jobless claims and a fresh batch of quarterly results, headlined by those from Morgan Stanley.

How did the benchmarks perform?

Futures for the Dow Jones Industrial Average YMH20, +0.29%   were trading 67 points, or 0.2%, higher at 29,096, with the blue-chip index attempting to extend its three-day run-up after closing at a record high, above the psychologically significant 29,000 a day ago. S&P 500 index futures ESH20, +0.35% were up 9.70 points, or 0.3%, at 3,303.50, those for the Nasdaq-100 NQH20, +0.44% were advancing 32.75 points, or 0.4%, at 9,092.75.

On Wednesday, the Dow DJIA, +0.31% rose 90.55 points, or 0.3%, at 29,030.22, the S&P 500 index SPX, +0.19% gained 6.14 points, or 0.2%, to close at a record at 3,289.29, while the Nasdaq Composite Index COMP, +0.08% gained 7.37 points, or 0.1%, to close at 9,258.70.

What drove the market?

Under the terms of the 96-page, phase-one trade agreement signed in the East Room of the White House on Wednesday, China is slated to purchase $95 billion more in U.S. commodities than in 2017, but investors harbor some doubts that the partial agreement will lead to a lasting according, as the world’s two largest economies move to the next phase of negotiations.

David Madden, market analyst at CMC Markets UK, said that “now that phase one of the agreement has been made official, people are talking about the second-phase,” writing in a Thursday research note.

The Wall Street Journal writes that the eight-part agreement, ending the 18-monthlong trade clash, leaves in place U.S. tariffs on about $370 billion in Chinese goods, or about three-quarters of Chinese imports to the U.S., with the removal of those tariffs expected to be a part of talks that are slated to begin “fairly soon but not conclude until after the U.S. presidential election in November.”

Outside of trade relations, market participants are bracing for earnings from Morgan Stanley MS, +0.15%, the Bank of New York Mellon Corp. BK, -0.63%, and CSX Corp. CSX, +0.44%.

Which data are in focus?

8:30 a.m. Eastern Time

  • Jobless claims for the week ended Jan. 11, with new unemployment claims to sit at 215,000, according to consensus estimates from Econoday.
  • Philadelphia Fed Business Outlook Survey, or Philly Fed, for January. Estimates are for a reading 3.0.
  • Retail sales for December, with a reading 0.4% expected.
  • Import and export prices for December. A monthly gain of 0.3% is estimated by Econoday.

10 a.m.

  • Business inventories are expected to come in down 0.1 percent, according to Econoday
  • The National Association of Home Builders housing market index for January is expected to show a reading of 75

after 4 p.m.

  • A report on the Federal Reserve’s balance sheet is due at 4:30 p.m., with the prior level standing at $4.150 trillion.
Which stocks are in focus?

Shares of Signet Jewelers Ltd. SIG, +2.33%  was sharply higher in premarket action after the company provided upbeat sales guidance.

Southwest Airlines Co. LUV, +0.99% said that it removed the Boeing Co.’s BA, -0.77% 737 Max flights from its schedule through June 6. Shares of Southwest were up 0.4% in premarket trade, while Boeing shares were up a slight 0.3%.