The major U.S. benchmarks rose modestly Monday morning, as a round of U.S.-China tariff negotiations in Beijing commenced and as the threat of another partial government shutdown loomed.
How are major indexes faring?
The Dow Jones Industrial Average
rose 74 points, or 0.3%, to 25,182, while the S&P 500 index
climbed 8 points, or 0.3%, to 2,716. The Nasdaq Composite Index
rose 36 points, or 0.5%, to 7,334.
What’s driving the market?
The latest round of trade talks set to begin Monday between the U.S. and China, with lower level discussions to start off the week, and Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer arriving Thursday and Friday for discussions.
Even if tariffs on Chinese goods remain at 10% beyond a looming deadline, as some have reported, the lingering uncertainty around a trade resolution would only highlight that a 12-month long negotiation between the world’s largest economies has failed to result in any deal.
That could further unsettle investors and U.S. corporations alike who are looking at a 12:01 a.m. Eastern Time March 2 deadline for an agreement to be struck between the two countries. The U.K., meanwhile, is spiraling toward a March 29 scheduled exit from the European Union with or without a trade agreement in hand.
As well, investors are bracing for another potential government shutdown after talks broke down between the main parties’ negotiators on Sunday over whether to limit the number of migrants authorities can detain. The White House hasn’t ruled out another shutdown if a border security compromise can’t be reached by midnight Friday.
There are no economic data releases schedule for Monday.
Which stocks are worth watching?
Restaurant Brands International Inc.
stock was up 2.6%, after the parent company of Burger King reported profit and same-store sales growth above Wall Street expectations.
Morgan Stanley Inc.
stock was down 0.4% Monday morning, after the bank announced the acquisition of Canada-based Solium Capital Inc., in a deal valued at $900 million.
Shares of Electronic Arts Inc.
were up 7%, building on Friday’s momentum, when it rose 16.1.% on news that the company’s Apex Legends game logged more than 10 million players in its first 72 hours.
What are the analysts saying?
“A lot of the good news out there is already priced into stocks at these levels,” wrote Tom Essaye, president of the Sevens Report, in a Monday note to clients. “At 2,700 or higher, the S&P 500 isn’t priced for perfection, but it is priced for positive resolution of numerous events,” including the U.S.-China trade spat, a stabilization of global economic growth, and the Fed declining to raise rates at all in 2019, he said.
“It’s not that good things aren’t possible, it’s that a lot of them are now assumed by the S&P 500 at 2700 or higher, and that creates not much reward and more risk,” Essaye wrote.
How did stocks perform last week?
On Friday, the Dow fell 63.20 points, or 0.3%, to 25,106.33, adding 0.2% for the week. The S&P 500 index rose 1.83 points to 2,707.88 and the Nasdaq Composite Index gained 9.85 points, or 0.1%, to 7,298.20.
The Dow extended its winning streak for a seventh week, while the S&P 500 and Nasdaq also logged gains.
How are other markets trading?
In Asia, the Shanghai Composite returned from a week of holidays to close up nearly 1.4%, while the Nikkei 225
was closed for a holiday. Stocks in Europe were higher across the board with the Stoxx Europe 600
was under pressure, while gold
also fell as the U.S. dollar
rose against its peers.
Providing critical information for the U.S. trading day. Subscribe to MarketWatch’s free Need to Know newsletter. Sign up here.