US Stock Market Overview – Stock Surge as Trump Flip Flops Lifting Dow Industrials

US stock prices surged on Monday, but the futures markets initially pointed to a lower open during the Asian time zone. Strong rhetoric from President Trump on Friday, put downward pressure on US stock futures. The rhetoric eased during comments from the G7 summit on Monday, allowing futures to rise and US stocks to move higher. President Trump sought to ease trade tensions with China and struck a more conciliatory note on the final day of the Group of Seven summit, where world leaders have pressured him to de-escalate the trade war. All sectors were higher on Monday led by technology and consumer staples. Drug giant Bristol-Myers Squibb cleared a major hurdle to complete its $74 billion acquisition of Celgene Corp, allowing the stock price to surge. Durable goods orders came in stronger than expected, which helped US yields rise and the dollar to gain traction.

President Trump is Generating Volatility

 

President Trump was on the tape on Monday, making comments from the G7 meeting in Europe. The President said that China has reached out to his camp and were willing to come back to the negotiating table. He also tried to calm the markets by striking a more conciliatory tone. He did make it clear that China needed the US more than the US needed China as he continued to try to get the upper hand on the Chinese. Mr. Trump also said he was open to meeting with Iranian President Hassan Rouhani under certain circumstances, as French President Emmanuel Macron. Speaking to reporters, Mr. Trump sounded a more optimistic note about trade talks. China had called US officials on the previous evening and said that they wanted to come back to the negotiating table according to the US President.

Durable Goods Order Rise more Than Expected

The commerce department reported that Durable Goods orders 2.1% in July, for the second consecutive monthly gain. Expectations had been for a 0.9% gain. The rise in orders was led by transportation, a 47.8% surge in aircraft and parts orders. Excluding that sector, orders fell 0.4%, the biggest drop since March. A key metric of business investment call orders for non-defense capital goods, rose 0.4% in July, but a gain in the prior month was revised down to a 0.9% gain from the prior estimate of 1.5% rise. Orders in this sector are now down 0.3% from a year ago. Shipments of non-defense capital goods fell 0.7% in July, largest drop since Oct. 2016. Orders for machinery, primary metals and fabricated metals also declined.

Bristol-Myers Clears Hurdle for Purchase of Celgene

Bristol-Myers Squibb Co. BMY +3.42% cleared a major hurdle to complete its $74 billion acquisition of Celgene Corp, after the two companies found a buyer for a skin treatment they hope would address antitrust concerns from regulators. Amgen Inc. agreed on Monday to buy Celgene’s psoriasis treatment Otezla for $13.4 billion in cash. The decision comes after the U.S. Federal Trade Commission raised anticompetitive concerns related to anti-inflammatory drugs.