What’s in Today’s Report:
- U.S.-China Trade Talks: Good/Bad/Ugly (and Best)
S&P 500 futures jumped as much as 1.4% in early morning trade after Bloomberg reported that China is willing to discuss a “partial U.S. trade deal despite tech blacklist.”
The risk-on rally has faded moderately however as the article pointed out that Chinese officials are not optimistic and would only accept a partial deal if the next waves of U.S. tariffs are canceled.
Furthermore, China is willing to make non-core concessions like ramping up purchases of U.S. ag products but won’t budge on key issues like intellectual property theft, issues which the White House has said are critical to a deal.
The trade war will clearly continue to dominate the markets today as we have already seen in the sizeable pre-market moves however there are a few additional potential catalysts to keep an eye on.
Economically, the August JOLTS report will be released shortly after the Wall Street open (E: 7.181M) while Powell and George are scheduled to speak at 11:00 a.m. ET (note Powell did move markets yesterday by mentioning balance sheet expansion).
In the afternoon, there is a 10-Yr Treasury Note Auction at 1:00 p.m. ET which could move the yield curve and ultimately the stock market before the FOMC Meeting Minutes will print at 2:00 p.m. ET.