US Stock Market News – T-bills auctions, Broader impact, European Union, Warren Buffett

US Stock Market News

As another round of US Stock Market News talks between U.S and China wrapped up, investors are eagerly looking forward to a positive build up. Dow Jones Industrial Average notched up 181.18 points on 25th February, Friday at a level of 26,031.81. the 30-stock index broke the records after a while and crossed the much awaited 26,000 level.

The rise was driven by Intel. Most Indices have gone off in a positive direction with Federal Reserve’s signal to go slow with the rate increase. Following large drops in 2018, these increases were much welcome.

Trade Setup for Monday

  • Broader impact of the U.S. – China trade talks, with China committing to purchasing $1.2 trillion U.S goods. This is regarded as a major boost for the country’s economy. The difficult part of the trade of IP (intellectual property) is yet to be discussed which is the main thorny issue between the 2 countries.

  • In a major development which can impact stocks on February 25, US President Donald Trump announced over the weekend that he would delay levying higher tariffs on goods from China because of trade talks between the countries which have been “productive.” He also said, “Assuming both sides make additional progress, we will be planning a Summit for President Xi and myself, at Mar-a-Lago, to conclude an agreement.” Unlike previously, he has not set a deadline for these talks this time.

  • On the parallel side, trade talks with the European Union are focusing on heavy machinery manufactured by the U.S such as Caterpillar. The fight is about labelling tariffs on cars made by the E.U in the U.S. in exchange for any restrictions on Caterpillar.
  • The Trump administration is looking to slap tariffs of 25% on E.U made cars and car parts.
  • In a shift from his previous stance, Berkshire Hathaway chief Warren Buffett has asked investors to pay attention to the company’s stock price. In his annual letter to the shareholder, the Oracle of Omaha said the price will “provide the best measure of business performance” over time.
  • There has been 8 consecutive weekly gains which had not happened since 1964 where Dow registered gains for 11 consecutive weeks. Investors are still concerned on the downside of risky assets,
  • Anxiety over U.S trade performance still looms ahead large -manufacturing contracts in February with export dependent German manufacturers where the worst drop in activity has happened during the last 6 years.
  • Today you can look at a number of T-bills auctions of 3 month, 6 month, 5 year and 2 year notes.
  • The Wholesale Inventories for December will be released as well to give an idea of the sale and trade direction. The data, which is released by the US Census Bureau, had printed at $654 billion for November in the last reading, up 0.3% from a month ago. Some segments of the market expect growth at a similar clip in the latest reading as well.
  • Packaged food industry which is huge in the U.S posted a quarterly loss and will be looked at carefully.
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