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US STOCKS-Wall Street set to open higher as U.S.-China trade talks advance - Reuters News

22-May-2018 09:12:16 PM

• China cuts car import tariffs amid easing trade concerns
• Ford, General Motors, Tesla rise
• Kohl's jumps after results, helps other retailers
• Futures up: Dow 0.2 pct, S&P 0.17 pct, Nasdaq 0.31 pct

Adds comment, adds details, updates prices

By Medha Singh

May 22 (Reuters) - Stock futures pointed to a higher opening on Tuesday on signs of further progress in trade talks between the United States and China as the world's two largest economies pull back from the brink of a full-blown trade war.

Washington neared a deal to lift its ban on U.S. firms supplying Chinese telecoms gear maker ZTE Corp, sources said on Tuesday, while Beijing said it will steeply cut import tariffs for automobiles and car parts.

Shares of Ford, General Motors, Tesla, as well as the U.S.-listed shares of Ferrari and Fiat, were up between 0.7 percent and 1.7 percent in premarket trading.

"The market is taking very well to what appears to be the fact that Trump is able to maneuver the trade talks in our favor," said Andre Bakhos, managing director at Janlyn Capital LLC in Bernardsville, New Jersey. "We're seeing a continuation of that positive momentum this morning."

The stock market has generally been volatile this year on a combination of factors including the fear of higher inflation spurring faster U.S. interest rate hikes and worries over a global trade war.

While investors may be relieved over the easing trade tensions, many U.S. government and industry officials view President Donald Trump is backing off from his tough stance against what they see as China's unfair trade and market access practices.

At 8:44 a.m. ET, Dow e-minis were up 50 points, or 0.2 percent. S&P 500 e-minis were up 4.75 points, or 0.17 percent and Nasdaq 100 e-minis were up 21.75 points, or 0.31 percent.

Among other gainers, Kohl's was up 5.9 percent after the department store chain topped quarterly profit estimates and lifted its annual profit forecast.

Rival Macy's, which reported strong quarterly results last week, gained more than 2 percent while discount operator TJX rose 0.6 percent after results.

"It's comforting to know that retailing side is not dead. Consumer discretionary stocks have done very well for a while now and that's a small sign but it's another advocate for a strong economy," Bakhos said.

Among decliners, Toll Brothers slid 4.2 percent after disappointing second-quarter profit and weighed on other homebuilders. Lennar dipped 1.1 percent, while PulteGroup slipped 0.5 percent.

Micron, which raised its quarterly forecast and led the chipmakers higher on Monday, jumped 6.7 percent after announcing a $10 billion share buyback.

Facebook edged up 0.3 percent ahead of Chief Executive Mark Zuckerberg's defense of the company's data practices to European lawmakers in Brussels. The testimony starts at 12:15 p.m. ET and comes three days before tough new European Union rules on data protection take effect.

The possibility of a ZTE reprieve boosted shares of optical component makers. Acacia Communications, which got 30 percent of its 2017 revenue from ZTE, rose 4.5 percent, while Oclaro gained 1.7 percent.

 

(Reporting by Medha Singh in Bengaluru; Editing by Sriraj Kalluvila)

 

 

 

UPDATE 5-Oil rises towards $80 as supply concerns mount - Reuters News

22-May-2018 08:27:16 PM

LONDON, May 22 (Reuters)

* Venezuela vote increases concern about its oil supply

* OPEC cuts, looming U.S. sanctions on Iran also support

* U.S. crude oil inventories seen lower for third week

(Updates prices)

By Alex Lawler

LONDON, May 22 (Reuters) - Oil rose towards $80 a barrel on Tuesday, supported by concern that falling Venezuelan crude output and a potential drop in Iranian exports could further tighten global supply.

Crude is trading at the highest since late 2014, underpinned by a supply-cutting deal among the Organization of the Petroleum Exporting Countries plus Russia and other non-members, and strong global demand.

Brent crude , the global benchmark, rose 54 cents to $79.76 a barrel by 1221 GMT. Last week, it topped $80 for the first time since November 2014.

U.S. crude was up 31 cents at $72.55, having earlier traded at $72.72, its highest since November 2014.

"The solid global economy, selected supply disruptions and the upbeat market mood in particular in oil frame a positive environment," said Norbert Ruecker, head of commodities and macro research at Julius Baer.

The U.S. government imposed new sanctions on Venezuela following Sunday's re-election of President Nicolas Maduro, a move that analysts say could further curb the country's oil output already at its lowest in decades.

"We can expect continued falling Venezuelan production," said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.

Concern about a potential drop in Iranian oil exports following Washington's exit from a nuclear deal with Tehran and the threat of U.S. sanctions is also supporting prices. On Monday, the United States hardened its approach to Iran.

Venezuela and Iran are members of OPEC, which with its allies has curbed production since January 2017 to get rid of a supply glut that in mid-2014 led to a price collapse.

Due in part to the involuntary drop in Venezuela's output, OPEC is over-delivering on the agreement. Saudi Arabia and other major OPEC producers could in theory add more supply, but have yet to do so.

The OPEC-led supply curbs have largely cleared an inventory surplus in industrialised countries based on the deal's original goals, and stocks continue to decline.

U.S. crude stockpiles are forecast to have declined by 2.8 million barrels last week, a third straight weekly fall. The American Petroleum Institute's inventory report for the period is due at 2030 GMT. [EIA/S]

Limiting the upward pressure on prices is rising supply in the United States, where shale production is forecast to hit a record high in June. [nL2N1SL1DC]

(Additional reporting by Jessica Jaganathan; Editing by Dale Hudson and Jane Merriman)

 

 

 

PRECIOUS-Gold gains as dollar rally comes off the boil - Reuters News

22-May-2018 08:20:09 PM

• Easing of geopolitical risk negative for gold - analyst
• SPDR gold holdings down 0.4 percent on Monday
• Platinum edges up from five-month low hit a day earlier

(updates prices)

By Maytaal Angel

LONDON, May 22 (Reuters) - Gold edged up on Tuesday from a 2018 low as the dollar fell from its five-month high, although risk appetite in the broader financial markets kept the metal's gains in check.

The dollar lost momentum following a rally prompted by rising U.S. bond yields and the prospect of a resolution to U.S.-China trade tensions. A weaker dollar makes dollar-priced gold cheaper for non-U.S. investors.

Washington and Beijing both claimed victory on Monday as the world's two largest economies stepped back from the brink of a trade war and agreed to hold further talks to boost U.S. exports to China.

"This quarter and maybe going into next, gold will continue to struggle but the (positive) views on the U.S. economy are overdone," said Philip Newman, director at Metals Focus.

"There are concerns over sizeable U.S. debt, there's the (U.S.) mid-term elections in November, there's enough out there that could see the dollar eventually weaken and gold prices start to improve through the back end of this year."

Spot gold edged up 0.2 percent to $1,294.91 per ounce by 1158 GMT. In the previous session, it slid to $1,281.76, its lowest since Dec. 27.

U.S. gold futures for June delivery rose 0.3 percent to $1,294.60 per ounce.

Capping gains in gold, European shares inched to a near four-month high as an easing of pressure on Italian markets coincided with China's latest move to open its economy to the rest of the world.

Gold, regarded as a safe haven, tends to weaken when there is strong investor appetite for equities, seen as riskier assets.

"The overriding narrative here is where the dollar is going," said Stephen Innes, APAC trading head at OANDA. Abating geopolitical risk was also weighing on sentiment for gold, he added.

Meanwhile, expectations that the Federal Reserve will raise U.S. interest rates again next month added to downward pressure on gold. Higher U.S. rates tend to boost the dollar and push bond yields up, making non-yielding assets such as bullion less attractive.

Innes said any drop to somewhere around the $1,275 level would start to attract more bullish sentiment. "But in the meantime the driver is going to remain the U.S. dollar," he added.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.38 percent to 852.04 tonnes on Monday.

Silver rose 0.8 percent to $16.60 an ounce, while palladium fell 1.4 percent to $975.72 an ounce.

Platinum climbed 1.4 percent to $908.50 an ounce, after marking a low for the year in the previous session at $873.50.

 

(Additional reporting by Karen Rodrigues and Apeksha Nair in Bengaluru; Editing by Dale Hudson and David Stamp)

 

 

 

Trump wants more from EU to lift tariffs - EU trade chief - Reuters News

22-May-2018 06:11:24 PM

By Philip Blenkinsop

BRUSSELS, May 22 (Reuters) - Europe's proposals to open its markets wider to U.S. products including cars appear not to have persuaded Washington to lift the threat of import tariffs on EU steel and aluminium, the bloc's trade chief said on Tuesday.

U.S. President Donald Trump has set tariffs of 25 percent on incoming steel and 10 percent on aluminium on grounds of national security but has granted EU producers an exemption until June 1 pending the outcome of talks.

EU leaders last week agreed on four areas the bloc would be willing to discuss, including easier access for industrial products, but only on condition that the exemption is made permanent.

EU Trade Commissioner Cecilia Malmstrom spoke with U.S. Commerce Secretary Wilbur Ross after the proposals were made public, but said Washington did not seem satisfied.

"I think they don't think it is enough," she told reporters before a meeting of EU ministers to discuss trade.

Luxembourg Foreign Minister Jean Asselborn seemed equally gloomy about prospects.

"I think that on June 1 we will have another deadlock," he said. "Perhaps we will take a step forward in terms of what we can offer the Americans. It could be that we move towards quotas. Everything is open, but it's difficult."

The areas identified for discussion are: greater market access for industrial products, including cars, and to government tenders; energy, notably liquefied natural gas (LNG); possible cooperation among regulators; and reform of the World Trade Organization.

Export-oriented Germany, which has been the keenest to avoid a trade conflict, described the EU leaders' proposals as a first step and forecast "intensive discussion" on Tuesday to find a deal acceptable to both Europe and the United States.

"Time is running out," German Economy Minister Peter Altmaier said. "We know what is on the menu, now we need to get a good meal together. I think that is feasible."

So far, the United States has given permanent metals tariff exemptions to Australia, Argentina, Brazil and South Korea, but in each case set import quotas.

Malmstrom said she could not imagine the EU accepting quotas unless they were at levels of exports in recent years.

"But we are under the impression that somehow they want to limit steel to the U.S., aluminium as well," she said.

 

(Reporting by Philip Blenkinsop
Editing by Richard Balmforth)

 

 

 

CBOT Trends-Wheat up 9-11 cents, corn up 2-3, soybeans up 5-6 - Reuters News

22-May-2018 09:23:23 PM

 

CHICAGO, May 22 (Reuters) - Following are U.S. trade expectations for the resumption of grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Tuesday.

 

WHEAT - Up 9 to 11 cents per bushel

• Wheat higher on a technical bounce after Monday's 2 percent slide in the CBOT July contract and on forecasts for warmer and drier conditions in the southern U.S. Plains winter wheat belt. Dryness in Australia remains a concern as well.
• The U.S. Department of Agriculture late Monday rated 36 percent of the U.S. winter wheat crop as good to excellent, unchanged from the previous week; analysts had expected a slight improvement.
• CBOT July soft red winter wheat last up 10-1/2 cents at $5.17-3/4 per bushel. K.C. July hard red winter wheat last traded up 11-3/4 cents at $5.38-1/4 and MGEX July spring wheat was up 6 cent at $6.27-3/4 a bushel.

CORN - Up 2 to 3 cents per bushel

• Corn heading higher for a third straight session on technical buying and spillover strength from wheat. Optimism about the easing of trade tensions between the United States and China lends support.
• Chart support noted in July corn at its 20-day moving average near $4.01.
• The USDA late Monday said the U.S. corn crop was 81 percent planted, matching the five-year average and topping an average of trade expectations for 80 percent.
• CBOT July corn last up 3 cents at $4.05-3/4 a bushel.

SOYBEANS - Up 5 to 6 cents per bushel

• Soybeans heading higher for a third straight session on technical buying and relief over the fading threat of a U.S. trade war with China, the world's biggest soy importer. CBOT July soybeans reached $10.32-1/2 ahead of the pause in trade, the contract's highest since May 10.
• Rally capped by better-than-expected U.S. soybean planting progress.
• The USDA late Monday said the U.S. soybean crop was 56 percent planted, well ahead of the five-year average of 44 percent and above an average of trade expectations for 54 percent.
• Brazil's truck drivers blocked major roadways around the capital of the country's largest grain state to protest increases in domestic fuel prices, the federal highway police said on Monday.
• CBOT July soybeans last up 6 cents at $10.31-1/4 per bushel.

(Reporting by Julie Ingwersen)

 

 

VEGOILS-Palm hits six-week peak on stronger crude oil and soyoil - Reuters News

22-May-2018 07:09:16 PM

• Palm posts strongest weekly percentage gain
• Registers third positive session in four
• Weaker production outlook also supports -trader

Updates with closing prices

By Emily Chow

KUALA LUMPUR, May 22 (Reuters) - Malaysian palm oil futures climbed to a six-week high in evening trade on Tuesday, charting a third session of gains in four, tracking overnight strength in U.S. soyoil and crude oil prices.

The benchmark palm oil contract for August delivery on the Bursa Malaysia Derivatives Exchange was up 1.3 percent at 2,477 ringgit ($624.64) a tonne at the end of the trading day for its largest percentage gain since May 14.

The market had hit an intraday peak of 2,485 ringgit, its highest since April 9.

Trading volume stood at 39,505 lots of 25 tonnes each by the close.

"Soyoil is up, and crude oil is trading at three-year highs," said one futures trader in Kuala Lumpur, adding that this encouraged more production of palm-based biodiesel.

Palm oil prices are affected by movements in crude oil because it is used as feedstock to produce biodiesel. Crude oil prices rose on Tuesday on concerns that Venezuela's output could drop further after a disputed presidential election and potential U.S. sanctions on the OPEC member.

Another trader said that expectations of lower palm oil production in May also supported benchmark prices.

Data from the Malaysian Palm Oil Board (MPOB) had showed that April output in the Southeast Asian country dipped by 1 percent to 1.56 million tonnes from a month earlier but was still the highest April level since 2015.

Palm oil is also affected by movements in rival edible oils that compete in the global vegetable oils market.

The Chicago July soybean oil contract jumped 1.4 percent on Monday, tracking rallies in soybean prices after the United States and China agreed to drop tariff threats as they work on a wider trade agreement.

Soyoil was up 0.7 percent at about 1100 GMT on Tuesday.

In other related oils, September soybean oil on China's Dalian Commodity Exchange fell 0.2 percent, while the Dalian September palm oil contract was trading flat.

 

(Reporting by Emily Chow
Editing by Amrutha Gayathri and David Goodman)