By CCN.com: US stock markets might be closed for Memorial Day, but that hasn’t stopped futures traders pumping the markets. Dow Jones Industrial Average futures rose on Monday as President Trump teased a wide-ranging trade deal with Japan as soon as August.
The Japanese Nikkei index also jumped in the Asian session as traders welcomed the news.
The cooling trade war tensions are a welcome relief for Wall Street after a month of bruising losses. The Dow is down 1,000 points (4 percent) this month and notched up its fifth-straight weekly decline.
Dow Futures tick up 28 points on Monday
As of 5.17 am ET, Dow Jones Industrial Average (DJIA) futures are up 28 points (0.11 percent). The modest rise is followed by S&P 500 futures (up 0.03 percent) and Nasdaq futures (up 0.06 percent).
It comes after a storming Asian session in which the Shanghai Composite Index (SSE) shot up 40 points (1.38 percent). Japanese traders also pushed the Nikkei index to 0.31 percent gains.
Trump eyes quick trade deal with Japan
On a state visit to Japan, Trump met with Prime Minister Shinzo Abe to address the “unbelievably large” trade imbalance between the two nations. In a press conference on Monday, the US president hinted at strong progress on trade talks with a view to removing trade barriers.
“The United States and Japan are also working to improve our economic relationship based on the principles of fairness and reciprocity. We are currently negotiating a bilateral trade agreement that would benefit both of our economies. Our goal is to reduce our trade deficit with Japan, remove trade barriers and barriers of all kinds so that US exports will really have a fair and very profound footing.”
Trump hinted that a trade deal would begin to take shape by August 2019. The timeline likely factors in Japan’s upper house elections which take place in July.
“Trade-wise, I think we’ll be announcing some things, probably in August, that will be very good for both countries” – President Donald Trump.
Dow futures traders relieved at swift progress
After a 1,000 point slump this month, Dow futures traders will be relieved that Trump softened his trade war rhetoric over the weekend. Trump had previously threatened tariffs on $50 billion worth of Japanese cars and called the widening deficit a “security threat.” At the Japan summit, he softened those comments:
“When I talk about a security threat, I talk about a balance sheet.”
Despite the friendship, there are still points of contention between the pair. Notably on trade and North Korea. For now, however, there seems to be broad agreement on a trade deal and traders are breathing a much-needed sigh of relief.
Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk, Twitter at _Ben_Brown or MuckRack. Email ben @ benjamin-brown.uk.
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