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CNBC News: Russia, US suspend nuclear treaty in a diplomatic standoff sparking jitters over a new arms race

  • Both the U.S. and Russia have suspended a crucial nuclear weapons ban on Saturday.
  • The Intermediate-Range Nuclear Forces, or INF, Treaty, prohibits the production or testing of ground-launched cruise missiles with a range of 300 to 3,400 miles.
  • The INF treaty has kept nuclear-tipped cruise missiles off the European continent for three decades. Read More..

U.S. stocks shrug off midday selloff to finish mostly higher on Wednesday

images4q5flkn2U.S. stocks shrugged off a midday selloff to finish mostly higher on Wednesday, as investors weighed a round of solid corporate earnings with ongoing uncertainty surrounding the U.S.-China trade talks. The Dow Jones Industrial Average DJIA, +0.70% was the best-performing major index, closing up around 170 points, or 0.7%, aided by solid earnings from IBM Corp. IBM, +8.46% and Procter & Gamble Co. PG, +4.87% The S&P 500 SPX, +0.22% finished up 0.2% and the Nasdaq Composite Index COMP, +0.08% was up less than 0.1%. In other company news, shares of Tesla Inc. TSLA, -3.79% fell more than 4% after RBC downgraded the stock to underperform and cut its price target to $245 from $290. Elsewhere, citing the government shutdown, House Speaker Nancy Pelosi said she would not authorize President Donald Trump to give his State of the Union speech in the chamber.

U.S. stock futures fall in shortened session as China data reinforces global slowdown fears

U.S. stock futures fell Monday in a shortened session, as the weakest Chinese growth data in three decades weighed on investors, and the International Monetary Fund cut its outlook for global expansion citing trade issues.

Regular trading for U.S. markets will be closed Monday in honor of Martin Luther King Jr. Day. Markets will resume the week on Tuesday.

How did the benchmarks fare?

Dow Jones Industrial Average futures YMH9, -0.03%  fell 150 points, or 0.6%, to 24,538, while S&P 500 futures ESH9, +0.01%  dropped 15.10 points, or 0.6%, to 2,656.50. Nasdaq-100 NQH9, +0.20%  fell 48.50 points, or 0.7%, to 6,743.

Stocks closed higher for the fourth-straight session on Friday. The Dow Jones Industrial Average DJIA, +0.70% rose 336.25 points, or 1.4%, to end at 24,706.35 for a weekly gain of 3%. The S&P 500 index SPX, +0.22% advanced 1.3% to 2,670.71, up 2.9% for the week. The Nasdaq Composite COMP, +0.08%  added 1% to 7,157.23, finishing out the week 2.7% higher.

What’s driving markets?

China’s gross domestic product for 2018 rose 6.6%, the slowest annual pace that the country has recorded since 1990. The downturn deepened in the fourth quarter of last year, with growth rising 6.4% on an annual basis. The trade conflict with the U.S. added to the country’s woes as some exporters were forced to lay off jobs.

Read: On trade, China’s private-equity king is ‘hopeful for the best, prepared for the worst’

The U.S. and China remain at loggerheads over a key issue to do with allegations that the latter has been engaged in the theft of intellectual property for decades. Bloomberg News reported very little progress has been made on the sticky subject even though the two sides have met in January. Meanwhile, President Donald Trump said on Twitter Saturday that stock-rallying reports last week that the U.S. would ease tariffs on China were not correct, even as he said talks were “going very well.”

The International Monetary Fund said Monday that it expects global growth this year of 3.5%, down from 3.7% in 2018 and from the 3.7% it had forecast for 2019 back in October, citing global trade tensions. Unveiling its forecasts at the World Economic Forum in Davos, Switzerland, the fund left its prediction for U.S. growth this year unchanged at 2.5%.

A partial government shutdown stretched into its 30th day on Monday, and there was little sign of the deadlock easing. Democrats rejected Trump’s latest proposal to temporarily extend protections for young immigrants brought to the country illegally in exchange for $5.7 billion for his border wall.

The shutdown has caused a backlog of economic data, with only a smattering of reports due this week, including existing home sales, weekly jobless claims and Markit manufacturing and services purchasing managers index data due later this week.

Opinion: These 3 leading economic indicators show no recession is coming

Earnings will also swing into focus with a busy week ahead for investors. Johnson & Johnson JNJ, +0.00%  , IBM Corp. IBM, +8.46%  , Advanced Micro Devices Inc. AMD, +0.20%  and Ford Motor Co. F, -1.88%

IBM earnings: Emerging tech expected to account for half of sales as revenue declines

And: Tech is ready to respond to Wall Street’s doubts, but don’t expect a holiday miracle

What are strategists saying?

“That is still a decent expansion by any standards, with the economy growing by 6.4% in Q4, however it reinforces the concerns of a slowdown that has prompted a series of measures by Chinese authorities this month to try to manage the worst effects of some sharp economic weakness that has spooked global investors,” said Michael Hewson, chief market analyst at CMC Markets U.K., in a note to clients. Hewson was referencing the China growth data.

How are other markets trading?

Markets in Asia saw a positive session, though gains were tempered by China data. The Shanghai Composite Index SHCOMP, +0.45% closed up 0.5%. In Europe, the Stoxx Europe 600 SXXP, -0.06%  was off 0.2%.

Crude oil US:CLG9 rose modestly, while gold GCG9, -0.24% dipped 0.2% to $1,279.70 an ounce and the U.S. dollar DXY, +0.01% was unchanged.

US CHINA TRADE: Stocks close higher on positive earnings, though trade concerns linger

Stocks closed higher in choppy trade Wednesday as upbeat earnings from corporate heavyweights helped to assuage lingering worries over global growth and U.S.-China trade tensions.

The Dow Jones Industrial Average DJIA, +0.70%  gained 171.14 points, or 0.7%, to 24,575.62, while the S&P 500 index SPX, +0.22%  rose 5.8 points, or 0.2%, to 2,638.70 and the Nasdaq Composite COMP, +0.08% climbed 5.41 points to 7,025.77.

Investors are laser-focused on fourth quarter results and closely monitoring what corporate executives are saying about the outlook for profits and revenue in 2019. Earnings reports have been largely well received by investors, starting with International Business Machines Corp. IBM, +8.46% after the management issued a bullish outlook for profits.

In overseas news, events in Venezuela could have an impact on the markets if the political unrest escalates. Venezuela’s President Nicolás Maduro broke off diplomatic relations with the U.S. after Washington’s decision to recognize Juan Guaido, the head of the opposition-controlled congress, as interim president.

Stock Ideas from Experts – TODAY’s CALL Watch

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25 Jan 2019, list of Stock tips by Kunal Bothra in Jan 2019

Author: The Future Markets

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