Strong positivism before the opening of the U.S. markets

01.10.2018 / 15:28

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U.S. stock index futures skyrocketed ahead of Monday's open as investors cheered news of Canada joining a trade deal with the United States and Mexico.

Canada and the U.S. secured a trade deal to replace the current North American Free Trade Agreement (NAFTA). The new accord is expected to be named the United States-Mexico-Canada Agreement, or "USMCA" for short, according to a senior U.S. administration official.

The agreement will deliver more market access to U.S. dairy farmers, while Canada has effectively capped automobile exports to the States. Both nations, along with Mexico – which agreed to a deal earlier this year – are expected to sign the agreement by the end of November. It would then be passed to Congress.

Shares of Ford and General Motors both jumped more than 1 percent in the premarket following the news. Boeing and Caterpillar, stocks that are also sensitive to trade news, rose 1.1 percent and 0.9 percent, respectively.

The moves on Wall Street came as some markets in Asia and most markets in Europe cheered the positive news. In addition, futures appeared to be building upon Friday's strong gains, when theS&P 500 achieving its best quarter since 2013, having risen 7.2 percent during July to September.

Investors are also keeping a close eye on Tesla, after news emerged that CEO Elon Musk had settled charges with the Securities and Exchange Commission over his recent aborted bid to take the firm private.

Over the weekend, news emerged that Musk would relinquish his position as chairman of the board at Tesla for at least three years and that, as part of the settlement, Tesla and Musk would pay $20 million each. Tesla shares jumped more than 15 percent on the news.

Meanwhile, General Electric surged 16 percent after the company abruptly removed CEO John Flannery from his post and named Lawrence Culp as his successor.

Source: CNBC

Trader Georgi Bozhidarov

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Strong positivism before the opening of the U.S. markets

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