U.S. Stocks Set To Open Higher As Traders Push Equities To Multi-Month HighsS&P 500 futures are gaining ground during the premarket trading session as traders cheer positive Manufacturing PMI data from Europe.
Euro Area Manufacturing Gets Back To Expansion Mode
The report showed that Euro Area Manufacturing PMI increased from 47.4 in June to 51.8 in July. Numbers above 50 show expansion. The return to growth is an encouraging development which may provide additional support to riskier assets.
Today, the U.S. will also release its Manufacturing PMI data. Analysts expect that U.S. Manufacturing PMI increased from 49.8 in June to 51.3 in July. A better-than-expected Manufacturing PMI report can provide more support to U.S. stocks and push them higher.
Republicans And Democrats Fail To Reach Consensus On New Coronavirus Aid Package
Republicans and Democrats continued their negotiations over the weekend but did not manage to reach consensus on the coronavirus aid deal.
Democrats want to preserve special unemployment benefits of $600 per week while Republicans are worried about costs and want to cut benefits to $200 per week.
As usual, there are other negotiating points, but the unemployment benefit topic remains the key source of discord.
Few analysts doubt that the U.S. needs to provide additional support to consumers to keep spending at healthy levels. The U.S. economy is dependent on consumer activity so a decline in spending could significantly hurt the recovery.
Microsoft May Buy TikTok’s U.S. operations
According to a recent Reuters report, U.S. President Donald Trump gave Microsoft 45 days to negotiate a deal to buy TikTok’s U.S. operations. Microsoft has already discussed the potential deal with Trump.
The U.S. has accused Chinese software companies of sharing data of U.S. citizens with the Chinese government, and TikTok is the first company in Washington’s crosshairs.
More Chinese companies will soon feel the same pressure as Secretary of State Mike Pompeo promised that Donald Trump would announce new measures to safeguard U.S. citizens’ data in the upcoming days.
China stated that it opposed actions against its software companies, and retaliation in some form is almost guaranteed.
For now, the U.S. stock market completely ignores another increase in U.S. – China tensions as it is focused on upbeat Manufacturing PMI data from Europe and expectations of good Manufacturing PMI data from the U.S.
For a look at all of today’s economic events, check out our economic calendar.