Report Of Tariff Exemptions May Lead To Initial Strength On Wall Street

(RTTNews) - The major U.S. index futures are currently pointing to a higher open on Monday, with stocks likely to extend the upward move seen over the course of last Friday's session.

Early buying interest may be generated in reaction to a report from the Wall Street Journal indicating the Trump administration is quietly watering down some of the tariffs that underpin the president's signature economic policy.

The Wall Street Journal said President Donald Trump has exempted dozens of products from his "reciprocal tariffs" in recent weeks and offered to carve out hundreds more goods when countries strike trade deals with the U.S.

However, traders may be somewhat reluctant to make significant moves ahead of the release of closely watched report on consumer price inflation on Friday.

Despite the ongoing government shutdown, Bureau of Labor Statistics said the consumer price index data will be released, as it allows the Social Security Administration to meet statutory deadlines necessary to ensure the accurate and timely payment of benefits.

Earnings season also picks up steam this week, with Coca-Cola (KO), General Motors (GM), Netflix (NFLX), AT&T (T), IBM Corp. (IBM), Tesla (TSLA), and Intel (INTC) among a slew of big-name companies due to report their quarterly results.

After showing a lack of direction early in the session, stocks moved mostly higher over the course of the trading day on Friday. The major averages all moved to the upside, regaining ground following the downturn seen during Thursday's session.

The major averages finished the day off their highs of the session but still firmly in positive territory. The Dow advanced 238.37 points or 0.5 percent to 46,190.61, the Nasdaq climbed 117.44 points or 0.5 percent to 22,679.97 and the S&P 500 rose 34.94 points or 0.5 percent to 6,664.01.

With the rebound on the day, the major averages posted strong gains for the week. The Nasdaq surged by 2.1 percent, while the S&P 500 and the Dow jumped by 1.7 percent and 1.6 percent, respectively.

The strength that emerged on Wall Street came as the concerns about bad loans that dragged the markets lower on Thursday seemed to evaporate as quickly as they materialized.

Shares of banking stocks like Jefferies (JEF) and Zions Bancorp (ZION) showed strong moves back to the upside after leading the markets lower in the previous session.

Jefferies and Zions benefitted from positive analyst comments, while banks like Truist Financial (TFC), Fifth Third (FITB) and Huntington Bancshares (HBAN) also moved higher after reporting better than expected quarterly earnings.

Stocks also benefited from easing concerns about the trade dispute between the U.S. and China following the latest comments from President Donald Trump.

In an interview with Fox Business, Trump said the high tariffs he has threatened on Chinese imports are "probably not [sustainable]" but argued "they forced me to do that."

Trump also confirmed he would meet with Chinese President Xi Jinping at a summit in South Korea later this month after previously casting doubt on whether the planned meeting would be worthwhile.

Despite the strength that emerged in the broader markets, most of the major sectors ended the day showing only modest moves.

Gold stocks showed a substantial move to the downside, however, with the NYSE Arca Gold Bugs Index plummeting by 7.4 percent after ending Thursday's trading at a record closing high.

The sell-off by gold stocks came as the price of the precious metal has pulled back sharply after soaring to record highs in recent sessions.

Commodity, Currency Markets

Crude oil futures are falling $0.45 to $57.09 a barrel after inching up $0.08 to $57.54 a barrel last Friday. Meanwhile, after plunging $91.30 to $4,213.30 an ounce in the previous session, gold futures are surging $110.20 to $4,323.50 an ounce.

On the currency front, the U.S. dollar is trading at 150.63 yen versus the 150.62 yen it fetched at the close of New York trading on Friday. Against the euro, the dollar is trading at $1.1655 compared to last Friday's $1.1651.

Asia

Asian markets finished trading on a strongly positive note on Monday, tracking the Wall Street rally on Friday linked to easing trade tensions between the U.S. and China.

Expectations that fiscal dove Sanae Takaichi would secure the premiership in Japan boosted sentiment in the Japanese stock market. Markets also cheered the GDP update from China that surpassed market expectations.

China's Shanghai Composite Index added 0.6 percent to finish trading at 3,863.89. The day's trading ranged between 3,877.72 and 3,850.37. The Shenzhen Component Index closed 1 percent higher at 12,813.21.

The Japanese benchmark Nikkei 225 Index rallied 3.6 percent to close at 49,185.50. The day's trading range was between 48,285.50 and 49,237.50.

SoftBank Group Corp topped gains with a surge of 8.5 percent. Yaskawa Electric Corp spiked 7.2 percent. Fanuc Corp., Mizuho Financial and Resona Holdings all gained more than 6 percent. Sumitomo Metal Mining and Sumitomo Dainippon Pharma both declined more than 1 percent.

The Korean Stock Exchange's Kospi Index added 66 points or 1.8 percent to close trading at 3,814.69. The day's trading range was between 3,728.38 and 3,814.69.

The Hang Seng Index of the Hong Kong Stock Exchange jumped 2.4 percent from the previous close to finish trading at 25,858.83. The day's trading range was between a high of 25,912.77 and a low of 25,710.61.

Australia's S&P/ASX200 Index closed trading at 9,031.90, gaining 0.4 percent from the previous close. The day's trading range was between 8,963.60 and 9,034.40.

Lynas Rare Earths topped gains with a surge of 6.6 percent. Generation Development Group, Zip Co., Neuren Pharmaceuticals and Beach Energy all followed with gains of more than 4 percent. Emerald Resources plunged 9.4 percent followed by Greatland Resources and Iluka Resources that both declined around 6.7 percent.

The NZX 50 Index of the New Zealand Stock Exchange rose 0.4 percent to close trading at 13,344.96, versus the previous close of 13,289.21. The day's trading ranged between 13,246.23 and 13,344.96.

NZX rallied 2.7 percent. Mercury NZ and Ryman Healthcare also rallied more than 2 percent. EROAD topped losses with a decline of more than 4 percent. Investore Property and Stride Property both eased more than 3 percent.

Europe

European stocks are broadly higher on Monday, led by gains in the defense sector amid geopolitical tensions. While there appears to be no prospect of peace in Ukraine, Israel and Hamas are accusing one another of violating the Gaza ceasefire.

Easing concerns about the health of the U.S. banking sector, and expectations of improved trade relations between China and the U.S. have contributed to the positive mood in the markets.

U.S. President Donald Trump sought to ease trade tensions, saying the much higher tariffs he had threatened to impose on Chinese imports would not be sustainable. A new round of U.S.-China trade talks are also set for this week.

Investors are also reacting to a spate of news on the corporate front.

The German DAX Index is up by 1.2 percent and the U.K.'s FTSE 100 Index is up by 0.4 percent, although the French CAC 40 Index is roughly flat.

Babcock International, up 3 percent, is the biggest gainer in the FTSE 100 index. Prudential, Airtel Africa, St. James's Place and Rolls-Royce Holdings are gaining 2 to 2.5 percent.

Melrose Industries, Weir Group, Endeavour Mining, BAE Systems and Smiths Group are up 1.5 to 1.8 percent.

Among the losers, Pearson is down 2.7 percent. WPP, Persimmon, Barratt Redrow, Easyjet, Metlen Energy & Metals, Mondia, Berkeley Group Holdings and Marks & Spencer are down 1 to 2 percent.

In the German market, Rheinmetall is rising 5.7 percent. Infineon Technologies, Heidelberg Materials, Siemens Energy, SAP, Siemens, Daimler Truck Holding and Deutsche Bank are up 1.3 to 2.5 percent.

Merck, Volkswagen, Zalando, Symrise, Vonovia and Mercedes-Benz are weak.

In the French market, Kering is gaining 3.75 percent after the company agreed to sell its beauty division to L'Oréal for €4 billion. L'Oreal shares are modestly higher.

Thales is up 3.6 percent Safran is gaining nearly 3 percent. STMicroElectronics, Legrand, Accor and Eurofins Scientific are up 1 to 2 percent.

Airbus is gaining more than 1 percent after the company recieved an order for 30 aircraft from India's IndiGo.

BNP Paribas is plunging 9 percent after a US jury held the bank responsible for helping to sustain Sudan's brutal regime under deposed leader Omar al-Bashir. The panel awarded three plaintiffs more than $20 million in damages.

Teleperformance is down 2.5 percent, while Credit Agricole and Societe Generale are lower by 1.4 percent and 1.3 percent, respectively.

In economic news, data from Destatis showed German producer prices decreased 1.7 percent year-on-year in September, following a 2.2 percent drop in August. Prices have been falling since March.

Month-on-month, producer prices slipped 0.1 percent, while prices were expected to climb 0.1 percent. However, this was slower than the 0.5 percent decrease posted in August.

U.S. Economic News

No major U.S. economic data is scheduled to be released today.