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US open: Flat start to session as investors mull over trade update

By Iain Gilbert

Date: Tuesday 10 Dec 2019

US open: Flat start to session as investors mull over trade update

(Sharecast News) - US stocks turned green at the open on Tuesday as market participants remained glued to their screens for any hint of fresh developments in the ongoing US-China trade war.
As of 1550 GMT, the Dow was up just 0.03% at 27,917.54, while the S&P 500 opened 0.09% firmer at 3,138.83 and the Nasdaq Composite started out the session 0.25% stronger to 8,643.70.

The Dow opened just 7.94 points higher on Tuesday as investors mulled over reports that the US may be looking to postpone the implementation of a $156bn-worth of additional tariffs on China that were scheduled to go into effect on the following Sunday.

The Wall Street Journal reported that the US planned to delay slapping China with further tariffs in order to work out a so-called "phase one" trade deal.

SpreadEx analyst Connor Campbell said: "The venerated financial outlet claims that Beijing and Washington are laying the groundwork to delay Sunday's tariff attack, giving both nations more time to haggle over their respective red lines. That'd be rolling back existing tariffs for China, and the mass purchasing of American farm products for the US.

"Though it is not the agreement the markets are so desperate for, a can-kick is better than nothing. Even if it does come with the knowledge that we have been here before, and it has only ever ended with the eventual imposition of the delayed tariffs."

Futures had initially been pointing to losses ahead of the bell after the South China Morning Post claimed China and the US were unlikely to reach a trade deal during the current week.

Investors were also looking ahead to the Federal Reserve's two-day meeting, set to conclude on Wednesday, with the central bank expected to keep interest rates steady, although analysts were curious to see if the latest very strong jobs data would be reflected in policymakers' forecasts for the economy.

On the data front, the National Federation of Independent Business' small business optimism survey rose 2.3 points in November to a four-month high of 104.7 - topping estimates of 103.

The figure marked the biggest climb in more than twelve months as more owners said profit trends appeared to be looking up amidst a favourable time for expansion.

Elsewhere, the productivity of American workers dipped during the third quarter, but unit labour costs rose by less than previously thought, revised data showed.

According to the Department of Labor, non-farm labour productivity in the States shrank at a quarterly annualised pace of 0.2% over the three months to September (consensus: -0.1%), as output per hour lagged the increase in the number of hours worked.

In terms of corporate news, AutoZone, Designer Brands, Dave & Busters and GameStop will all report throughout the course of the day.

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