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Stocks kicked off a busy week on a high note as investors looked forward to the signing of a U.S.-China trade deal and the start of fourth-quarter earnings season later this week.
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12:14 p.m. ET: S&P 500 hits record high after reports U.S. will remove China’s designation as a currency manipulator
The S&P 500 touched a fresh record high shortly after noon on Monday following reports that the U.S. is planning to remove China from a list of countries designated as currency manipulators. Outlets including Bloomberg and CNBC reported the decision, citing unnamed people familiar with the matter.
The Treasury Department had designated China a currency manipulator in early August, in a decision that at the time had sent signaled escalating U.S.-China tensions and sent financial markets roiling. This came after China allowed the yuan to weaken past the psychologically important level of 7 per dollar for the first time in more than a decade.
The decision to lift this label is expected to be formalized in a forthcoming Treasury Department report, Bloomberg reported.
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11:05 a.m. ET: Stocks hold in the green
The three major domestic stock indices held in positive territory about an hour-and-a-half into Monday’s session.
The materials and real estate sectors led gains in the S&P 500, while health-care remained slightly negative. Dow Inc. (DOW) and Cisco (CSCO) led advances in the 30-stock Dow and were both up more than 1% during intraday trading.
Here were the main moves in markets, as of 11:05 a.m. ET:
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S&P 500 (^GSPC): +0.37% or +12.04 points to 3,277.39
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Dow (^DJI): +0.21% or +59.13 points to 28,882.90
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Nasdaq (^IXIC): +0.46% or +42.49 points to 9,221.35
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Crude oil (CL=F): -1.2% or -$0.71 to $58.33 a barrel
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Gold (GC=F): -0.51% or -$7.90 to $1,552.20 per ounce
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10:09 a.m. ET: Fed’s Rosengren sees ‘two risks to the forecast’ worth watching
The potential for a sudden build-up in inflation and financial asset bubbles are two key risks to the 2020 economic outlook, Boston Fed President Eric Rosengren said during a speech in Connecticut on Monday.
“More rapid than expected inflation remains a risk of running the economy with accommodative monetary policy and tight labor markets,” he said in the prepared text of the speech. Emphasis his.
To the second point, Rosengren said that “persistently low interest rates could lead consumers and firms to take on riskier financial investments in search of better returns, increasing asset prices to unsustainable levels.” Rosengren had opposed all three of the Federal Reserve’s interest rate cuts last year.
Rosengren acknowledged that there are other downside risks to the outlook as well, including around trade and slowing economic growth.
“But I see the potential risks to inflation and financial stability as somewhat more concerning, overall,” he said.
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9:37 a.m. ET: Tesla leaps above $500 per share
Shares of Tesla (TSLA) jumped above $500 each for the first time ever as momentum in the automaker’s stock rolled on.
The stock’s more than 4% advance was supported by a bullish call from Oppenheimer. Analyst Colin Rusch raised his price target on shares of Tesla to $612 per share from $385 previously, implying more than 20% appreciation from Friday’s closing prices. Rusch’s price target represented the highest among major Wall Street analysts to date.
Additionally, China announced over the weekend that it would not be reducing subsidies for electric cars this year on the same timeline as last year, in a move seen to help support demand for new energy vehicles. Tesla began delivering Model 3 vehicles built in China to customers in the country earlier this month.
Shares of Tesla are up about 44% over the past year.
Tesla Inc CEO Elon Musk walks next to a screen showing an image of Tesla Model 3 car during an opening ceremony for Tesla China-made Model Y program in Shanghai, China January 7, 2020. REUTERS/Aly Song
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9:30 a.m. ET: Stocks open higher
Each of the three major indices rose Monday morning around market open, shaking off declines from Friday.
Tech stocks led the S&P 500 higher, with the information technology and communications sectors outperforming. Health-care was the only sector slightly in the red around market open.
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S&P 500 (^GSPC): +0.18% or +5.94 points to 3,271.29
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Dow (^DJI): +0.08% or +22.45 points to 28,846.22
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Nasdaq (^IXIC): +0.32% or +29.55 points to 9,208.41
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Crude oil (CL=F): -0.53% or -$0.31 to $58.73 a barrel
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Gold (GC=F): -0.3% or -$4.70 to $1,555.40 per ounce
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9:13 a.m. ET: What investors are watching this week
While Monday’s docket of economic data and corporate earnings releases remains sparse, investors are looking forward to a busy calendar the rest of the week.
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Financial institutions including JPMorgan Chase (JPM), Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C), Wells Fargo (WFC) and Bank of America (BAC) are set to report fourth-quarter earnings results starting Tuesday.
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The U.S. and China are poised to sign a phase one trade agreement in Washington, D.C., on Wednesday.
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The Federal Reserve’s Beige Book – a collection of anecdotes about the economic situation in each of the major Fed districts – is due for release Wednesday.
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U.S. retail sales data for the key holiday shopping season in December will be released by the Commerce Department Thursday.
Read more about the week ahead
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7:42 a.m. ET: Oil prices hold steady despite upheaval in Iran
Over the weekend, Iran admitted that it had accidentally downed a Ukrainian passenger jet last Wednesday, leading to a crash that killed all 176 people aboard. Initially, Tehran had denied shooting down the aircraft.
The admission ushered in protests in Iran beginning on Saturday, with citizens demonstrating against what they perceived as incompetence by the country’s leadership. Outlets including the Associated Press reported that Iranian police forces had used live ammunition to try and disperse protestors, while Iran’s government has denied that these methods of quelling protestors were used.
The reports sparked a response from President Donald Trump, who wrote a Twitter post over the weekend in support of the Iranian protestors.
Despite the unrest in the Middle East, oil prices remained relatively stable, after domestic crude oil futures posted their largest weekly drop since July on Friday. West Texas intermediate prices held around flat at $59.05 per barrel Monday morning, while Brent ticked down slightly to below $65 a barrel.
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7:20 a.m. ET: Stock futures rise
U.S. stocks futures advanced as traders shrugged off tensions in the Middle East and looked toward the start of corporate earnings season and the signing of a U.S.-China initial trade deal later this week.
Here were the main moves during the pre-market session, as of 7:20 a.m. ET:
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S&P futures (ES=F): 3,273.00, up 8.25 points or 0.25%
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Dow futures (YM=F): 28,852, up 75 points or 0.26%
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Nasdaq futures (NQ=F): 9,013.25, up 35 points or 0.39%
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Crude oil (CL=F): $59.03 per barrel, down $0.01 or 0.02%
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Gold (GC=F): $1,554.20 per ounce, down $5.90 or 0.38%
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 10, 2020. REUTERS/Brendan McDermid
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