Futures higher on trade deal optimism; jobs data in focus

[November 02, 2018]   By Shreyashi Sanyal

(Reuters) - U.S. stock index futures pointed to a fourth day of gains for Wall Street on Friday, fueled by hopes that the United States and China were starting to work toward a resolution of their bitter trade war that has weighed on expectations of global growth, and ahead of the closely watched monthly jobs report.

The S&P 500 futures <ESc1> and the Dow Jones Industrial Average futures <1YMc1> pointed to a near 1 percent rise for the indexes at open, but gains in Nasdaq futures <NQc1> were limited by losses in shares of Apple Inc <AAPL.O>.

Apple fell 5.6 percent in premarket trading, after the world's most valuable technology company warned that sales for the crucial holiday quarter would likely miss expectations, blaming weakness in emerging markets and foreign exchange costs.

But markets got a lift from the latest development on the trade front, as President Donald Trump and his Chinese counterpart Xi Jinping expressed optimism about resolving the trade dispute ahead of a high-stakes meeting at the end of November in Argentina.

The positive signals also triggered a global surge in risk appetite.

Shares of trade-sensitive industrial bellwethers, Caterpillar Inc <CAT.N>, Boeing Co <BA.N> and 3M Co <MMM.N>, rose between 1 percent and 2.5 percent.

The Labor Department's employment report will likely show that U.S. job growth rebounded in October, with wages expected to have recorded their largest annual gain in 9-1/2 years.
 

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 1, 2018. REUTERS/Brendan McDermid

The report, due at 8:30 a.m. ET (1230 GMT), is also forecast to show the unemployment rate steady at a 49-year low of 3.7 percent. Sustained labor market strength could ease fears about the economy's health following weak housing data and stalling business spending.

At 7:11 a.m. ET, Dow e-minis <1YMc1> were up 242 points, or 0.96 percent. S&P 500 e-minis <ESc1> were up 19.75 points, or 0.72 percent and Nasdaq 100 e-minis <NQc1> were up 8 points, or 0.11 percent.
 

Wall Street had been rocked in October, on fears of a widening global trade dispute, rising borrowing costs and that U.S. earnings growth may slow more than forecast in 2019.

Amazon.com Inc <AMZN.O>, Google-parent Alphabet Inc <GOOGL.O>, Facebook Inc <FB.O> and Netflix Inc <NFLX.O> were trading higher, despite Apple's disappointing forecast.

Among other stocks trading before the bell, Starbucks Corp <SBUX.O> jumped 9.2 percent after the coffee chain reported same-store sales that beat estimates, benefiting from higher prices in the United States and a rebound in China.

Kraft Heinz Co <KHC.O> dropped 8 percent, after the company missed quarterly earnings estimates on steep commodity costs.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Sriraj Kalluvila)
 

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