Portfolio

US pre-open: Boeing set to continue dragging on Wall Street

By Alexander Bueso

Date: Monday 21 Oct 2019

US pre-open: Boeing set to continue dragging on Wall Street

(Sharecast News) - Wall Street trading looked set to get off to a positive start on Monday, thanks to positive headlines around the US-China trade talks and increasing optimism that the UK would be able to avoid crashing out of the European Union.
Speaking on Saturday, Chinese vice premier, Liu He, said that "substantial progress" had been made with Washington on laying the foundation for an initial accord on trade.

Meanwhile, across the Pond, investors were waiting to see if the British Prime Minister's proposed Brexit deal was put to a meaningful vote later on Monday, although a government spokesman had reportedly threatened to pull the legislation if opposition members tried to amend it.

Indeed, while analysts were more confident that a 'no-deal' Brexit had been averted, many observers said that Johnson's deal was in fact 'harder' than his predecessor's and many still saw the possibility that snap elections might be called with some analysts remaining very cautious.

"Market confidence in avoiding a no-deal exit remains undimmed following Saturday's non-vote. However, in seeking to delay and frustrate Brexit, there is a chance that MPs overplay their hand and drive the UK towards a no-deal Brexit," said Neil Wilson, chief market analyst at Markets.com.

As of 1337 BST, futures on the Dow Jones Industrials were rising by 42.0 points to 26,796.0, while those on the &P 500 were up by 10.0 points a 2,998.25 and those for the Nasdaq-100 were climbing by 30.75 points to 7,911.50.

In parallel, the yield on the benchmark two-year US Treasury note was edging up by 2 basis points to 1.59%.

There was also some cautiousness in analysts' views on the latest US-China trade headlines.

"Regarding US-China trade tensions, investors remain skeptics about a proper trade deal, as they want to see a commitment that further tariffs are really off the table before changing their positions. The same applies to Brexit," said analysts at Bank of America-Merrill Lynch.

On the corporate front, stock in Boeing was still in focus as the sell-off seen during the previous session, when it was revealed that some company employees thought that they might have unintentionally misled the US Federal Aviation Authority, continued to take its toll.

Adding to the selling pressure on Monday were downgrades out of UBS and Credit Suisse, with the former cutting its target price on the shares from $470.0 to $375.0.

Boeing was due to publish third quarter earnings on Wednesday.

No major economic releases were scheduled for Monday in the States.

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