A potential catalyst for further equity gains emerged on Friday amid a report that China will step up efforts to meet the conditions of a Phase 1 trade deal by buying more American farm products.
Dow Jones Industrial Average
futures are up 0.9%.
and Nasdaq Composite futures have each gained 0.8%. Including Friday’s premarket gain, the Dow has gained back almost 50% of last week’s 1,500-point drop.
Overseas shares are higher too. China’s
rose 1%, while Hong Kong’s Hang Seng Index closed up 0.7%. Europe’s FTSE 100 Index was 1.3% higher.
Global equities and other assets got a boost after Bloomberg reported that China plans to step up purchases of U.S. soybeans, corn and ethanol in line with a U.S.-China Phase 1 trade deal, according to sources.
That development comes after Secretary of State Mike Pompeo met with China’s top foreign policy official in Hawaii on Thursday. He tweeted that the official had promised to meet the terms of the trade agreement.
Shares of Archer Daniels Midland (ticker: ADM) and Bunge (BG), big processors of farm products, were up 2.1% and 0.4% in premarket trading, respectively.
Oil prices gained ground along with stocks. Oil for July delivery is up 2.4% to almost $40 a barrel. For the week, West Texas Intermediate crude prices are on track to gain more than 10%.
Energy stocks also gained. Occidental Petroleum (OXY) shares, for instance, rose 4.4%, also lifted by news that SunTrust upgraded the shares to the equivalent of Buy with a $25 price target. Stock in energy services giant Halliburton (HAL) was up 3.6%.
Investors could see some extra volatility on Friday, which marks U.S. quadruple witching — the simultaneous expiration of single-stock options, single-stock futures, and stock-index options and stock-futures.
That is as they watch out for comments from Federal Reserve Chairman Jerome Powell, who is scheduled to make an appearance in a discussion about building a resilient workforce during the Covid-19 era. Vice Chair for Supervision Randal Quarles is due to discuss stress testing.
Among stocks on the move, in Europe, shares of Germany’s
tumbled another 44%, extending Thursday’s sharp declines when the German payments processor said its auditor could not locate €1.9 billion ($2.1 billion) in cash on its balance sheet.
Wirecard could see banks terminate €2 billion in loans if it can’t file its 2019 accounts on Friday.
Cinema giant AMC Entertainment (AMC) also had some good news for investors Thursday, announcing plans to reopen theaters in mid-July, in time for the theatrical release of the live-action Disney (DIS) film Mulan and Warner Bros.’ Tenet.
Plans for moviegoer safety include: capping attendance at 30% of seating capacity, more cleaning, reduced menu selections, and masks for all employees, among other actions.
AMC shares were up 8.2% in premarket trading, while Disney gained about 0.7%.
Theater peer Cinemark (CNK) announced similar plans Wednesday. Its shares were up another 2.9% in premarket trading after rising 4.4% Thursday.
When stock-index futures rise these days, travel shares—hit hard by Covid-19—typically rise more. That’s the case again Friday. American Airlines (AAL) shares, for instance, were up 2.8% in premarket trading. Stock in cruise operator Carnival (CCL) gained 2.2% after falling 1.4% on Thursday.
Shares of Slack Technologies (WORK) were down 1.5% in premarket trading after Goldman Sachs cut its rating on the shares to Sell. The broker has a $30 price target for the stock, below recent trading levels of about $34.
Slack has benefited from work-from-home trends. The stock was up more than 50% year to date, as of Thursday’s closing price.