Futures Point to Higher Open with Trade Talks Resuming
S&P futures vs fair value: +8.10. Nasdaq futures vs fair value: +35.50. The S&P 500 futures trade eight points, or 0.3%, above fair value with the benchmark index already up 15.2% from its Dec. 24 low. With earnings season winding down, investors will keep an eye for any signs of progress regarding U.S.-China trade talks and border security talks this week.Lower-level officials kicked off another round of trade talks between the U.S. and China today in Beijing. Higher-level talks will take place Thursday and Friday with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in hopes of making progress before the March 1 deadline.In Washington, border security talks have reportedly broken down, dampening efforts to prevent another shutdown by the Feb. 15 deadline. President Trump is expected to be interviewed by Fox News tonight at 10:00 p.m. ET.U.S. Treasuries are roughly unchanged with the 2-yr yield and 10-yr yield up one basis point each to 2.47% and 2.64%, respectively. The U.S. Dollar Index is up 0.2% to 96.79. WTI crude is down 0.9% to $52.26/bbl.In U.S. Corporate news:Tesla (TSLA 314.00, +8.20): +2.7% after the stock was upgraded to 'Buy' from 'Hold' at Canaccord Genuity with a target share price of $450.NVIDIA (NVDA 146.21, -1.96): -1.3% after the stock's target price was lowered to $200 from $244 at Citigroup. Reviewing overnight developments:Equity indices in the Asia-Pacific region began the week on a higher note while Japan's Nikkei was closed for National Founding Day. U.S. officials will once again visit Beijing at the end of the week to continue trade talks with representatives from China. Japan's Nikkei CLOSED, Hong Kong's Hang Seng +0.7%, China's Shanghai Composite +1.4%, India's Sensex -0.4%, South Korea's Kospi +0.2%, Australia's ASX All Ordinaries -0.1%.In economic data:China's January FX Reserves $3.070 trillion (expected $3.079 trillion; last $3.070 trillion)
Hong Kong's January FX Reserves $432.00 billion (last $424.70 billion)In news:China Daily reported that China's GDP growth is expected to slow to 6.3% in 2019 from last year's 6.6%.Xinhua reported that sales during the Lunar New Year grew 42.7% year-over-year.Major European indices trade on a broadly higher note with Italy's MIB (+1.3%) in the lead. STOXX Europe 600 +0.7%, Germany's DAX +0.8%, UK's FTSE 100 +0.6%, France's CAC 40 +0.8%, Spain's IBEX 35 +0.6%.In economic data:UK's December GDP -0.4% month-over-month (expected 0.0%; last 0.2%). Q4 GDP +0.2% quarter-over-quarter (expected 0.3%; last 0.6%); +1.3% year-over-year (expected 1.4%; last 1.6%). Q4 Business Investment -1.4% quarter-over-quarter (expected -1.3%; last -1.2%); -3.7% year-over-year (expected -3.0%; last -1.9%). December Construction Output -2.8% month-over-month (expected 0.2%; last 0.1%); -2.4% year-over-year (expected 1.5%; last 1.8%). December Industrial Production -0.5% month-over-month (expected 0.1%; last -0.3%); -0.9% year-over-year (expected -0.4%; last -1.3%). December Manufacturing Production -0.7% month-over-month (expected 0.2%; last -0.1%); -2.1% year-over-year (expected -1.1%; last -1.2%). December trade deficit GBP12.10 billion (expected deficit of GBP12.00 billion; last deficit of GBP12.40 billion)Swiss January CPI -0.3% month-over-month (expected -0.2%; last -0.3%); +0.6% year-over-year, as expected (last 0.7%)In news:Italian debt has also advanced, erasing a portion of its decline from last week. There has been speculation that Spain's Prime Minister Pedro Sanchez could call an early election that would take place on April 14.British Prime Minister Theresa May reportedly turned down Labour's plan for a customs union, but noted that there was a lot of common ground between the two parties.The prime minister is expected to make a statement about Brexit in the House of Commons tomorrow.