Global Stocks Rebound, Dow Futures Leap as US Moves to Cool Trade War Talk
London (Mar 26) Global stocks rebounded Monday, pulling European markets higher and lifting U.S. equity futures into the green, following news that White House trade officials agreed to exempt South Korea from steel tariffs and were ready to open dialogue with China in an effort to avert a global trade war that has threatened economic growth and hammered financial markets around the world.
Contracts tied to the Dow Jones Industrial Average marked 299 points higher from their Friday close, indicating an implied opening bell gain of 379 points, while those linked to the broader S&P 500 were seen 35 points, or 1.37%, to the upside following a week in which the benchmark slumped 6% and fell into negative territory for the year. Nasdaq futures were marked 108.25 points higher.
Facebook Inc. (FB - Get Report) shares are set to open near an eight-month low Monday, extending a decline that hived more than $50 billion from the company's market value last week, as some of the world's most powerful CEOs call for stricter government oversight of the social media giant following a data scandal that may have affected 50 million users. Action Alerts Plus holding Facebook shares were marked 0.48% to the downside in pre-market trading Monday, indicating an opening bell price of $158.2 each, the lowest since July 2017, and a move that would take the stock 19% lower from its Feb. 1 intra-day record of $195.32.
In Europe, the Stoxx 600 index rose 0.26% to 366.76 points by mid-day in Frankfurt while Britain's FTSE 100 added 0.14% to start the week at 6,936.50 points while Germany's DAX performance index gained 0.32% to 11,940 points.
U.S. and South Korean officials agreed to revise portions of their KORUS trade deal, the pair said Monday, with Seoul accepting a limit on its steel exports to the United States in exchange for an exemption on tariffs and a pledge to open its market to American automakers.
The news followed reports that trade officials from both Washington and Beijing were holding closed-door discussions in order to iron out terms of a bi-lateral deal that could avert a back-and-forth battle of trade tariffs and import restrictions after last week's decision by President Donald Trump to target between $50 billion and $60 billion in China-made goods as part of his broader "America First" economic strategy.
"As President Trump said, we're not afraid of a trade war, but that's not our objective," U.S. Treasury Secretary Steve Mnuchin told Fox News Sunday. "We're having very productive conversations with (China). I'm cautiously hopeful we reach an agreement."
The MSCI Asia ex-Japan index, the broadest measure of regional share prices, turned positive near the end of the session while Japan's benchmark Nikkei 225 jumped 0.72% to close at 20,766.10 points.
However, despite the Monday optimism, investors are still clearly unnerved by the prospect of a global trade war and the implications it would have on one of the key pillars of equity market performance: coordinated global economic growth.
The Japanese yen, a safe-haven favorite for investors during Asia trading hours surged to a 16-month high of 1.0456 against the U.S. dollar before paring that advance to 1.0490 by the end of the session, while the dollar index, a measure of the greenback's strength against a baskets of six global currencies, remained pinned near a one-month low of 89.46. Benchmark 10-year U.S. Treasury yields were little changed from their Friday levels at 2.84% while gold was modestly softer at $1,344.55 per ounce.
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