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Wall Street begins week on higher note following Trump trade comments
26-Aug-19 16:20 ET
Dow +269.93 at 25898.81, Nasdaq +101.97 at 7853.76, S&P +31.27 at 2878.38

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The stock market rebounded more than 1% on Monday, catalyzed by President Trump's contention that China called top U.S. negotiators to restart trade talks. The S&P 500 advanced 1.1%, which was comparable to the gains in the Dow Jones Industrial Average (+1.1%), Nasdaq Composite (+1.3%), and Russell 2000 (+1.1%). Most of the price action occurred before the open, but the market was able to close near session highs.

When the futures market opened for trading Sunday evening, the indication for today's open was sharply lower. Presumably, the market was reacting to President Trump's announcement made after Friday's close that he was planning on increasing the tariff rates on $525 billion of Chinese imports. Futures quickly climbed into positive territory in overnight action following the president's remarks from the G7 meeting in France.

Interestingly, the market held its positive posture throughout the day even though trade talks were already planned for September. China's Foreign Ministry spokesman also denied knowledge of any such calls while Chinese press downplayed the significance of Mr. Trump's statement. In a conciliatory move, President Trump reciprocated China's willingness to resolve their dispute through "calm" negotiations.

Gains were broad-based, yet investors didn't appear in any hurry to jump into the action given the relatively light trading volume during the day. Mega-cap stocks within the S&P 500 communication services (+1.5%) and information technology (+1.4%) sectors provided influential leadership. The trade-sensitive materials sector (+0.3%), oddly enough, increased the least.

In key corporate news, Bristol-Myers (BMY 48.11, +1.53, +3.3%) sold Celgene's (CELG 97.00, +3.01, +3.2%) psoriasis drug Otezla to Amgen (AMGN 205.41, +6.33, +3.2%) for $13.4 billion in cash. Bristol-Myers hoped that by selling the rights to Otezla, it would appease any antitrust concerns as it tries to get its merger agreement with Celgene approved.

Separately, oil and gas company TechnipFMC (FTI 24.01, +0.91, +3.9%) announced it will split into two publicly traded companies.

U.S. Treasuries finished the day lower, giving up an overnight rally following President Trump's trade comments. The 2-yr yield increased two basis points to 1.55%, and the 10-yr yield increased one basis point to 1.55%. The U.S. Dollar Index advanced 0.4% to 98.07. WTI crude lost 0.9% to $53.70/bbl on speculation that a possible U.S.-Iran meeting could lead to oversupply.

Reviewing Monday's economic data, which was limited to Durable Goods Orders for July:

Durable goods orders increased 2.1% (Briefing.com consensus +1.2%) following a downwardly revised 1.8% increase (from 2.0%) in June. Excluding transportation, durable goods orders decreased 0.4% (Briefing.com consensus +0.1%) following a downwardly revised 0.8% increase (from 1.2%) in June.
The key takeaway from the report is that orders for nondefense capital goods, excluding aircraft -- a proxy for business investment -- increased 0.4% in July on the heels of a 0.9% increase in June. Shipments, though, dropped 0.7%, which is a component that will factor into Q3 GDP forecasts.

Looking ahead, investors will receive the Conference Board's Consumer Confidence Index for August, the FHFA Housing Price Index for June, and the S&P Case-Shiller Home Price Index for June on Tuesday.

Nasdaq Composite +18.4% YTD
S&P 500 +14.8% YTD
Dow Jones Industrial Average +11.0% YTD
Russell 2000 +9.5% YTD