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.
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.
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.
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.”
Trump said a trade deal with Japan would center around beef and agriculture. He also praised the Japanese people and the country’s culture.
“They are brilliant business people, brilliant negotiatiors and have put us in a tough spot but I think we will have a deal with Japan.”
Unlike Trump and Xi Jinping’s adversarial relationship, the US president has a close bond with the Japanese premier. Abe even nominated Trump for a Nobel prize earlier this year.
In between the economic talks, Trump and Abe took time out to play golf and attend a sumo wrestling match.
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.
Last modified: July 2, 2020 8:25 PM UTC