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Top 5 Things to Know in The Market on Tuesday

Investing.com - Here are the top five things you need to know in financial markets on Tuesday, February 12:

1. Lawmakers Reach Tentative Deal to Avoid Government Shutdown

Political headlines will remain in focus amid news Democratic and Republican lawmakers reached a tentative deal on border security funding, easing fears over another partial government shutdown, which was due to begin from Saturday.

A congressional aide, who asked not to be identified, said the outline of the deal did not contain the $5.7 billion President Donald Trump wants for a border wall, but instead included $1.37 billion for erecting 55 new miles of new fencing along the southern border.

The tentative deal still has to be written into legislation, pass both chambers of Congress and get Trump’s approval before Friday night to avoid a partial government shutdown.

2. Day 2 of U.S.-China Trade Talks

U.S. Trade Representative Robert Lighthizer arrived in Beijing as high-level trade talks between the U.S. and China entered a second day.

Talks kicked off with discussions among deputy-level officials on Monday before minister-level meetings later in the week.

The two sides are trying to hammer out a deal ahead of the March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25% from 10%.

Washington is expected to keep pressing Beijing on long-standing demands that it make sweeping structural reforms to protect American companies' intellectual property, end policies aimed at forcing the transfer of technology to Chinese companies, and curb industrial subsidies.

3. Dow Futures Point to Triple-Digit Gains

U.S. stock futures pointed to a higher open, with the Dow set for a triple-digit gain, as investors cheered signs of a compromise in the standoff over the U.S. government funding and positive signals around U.S.-China trade talks.

At 5:35AM ET (10:35 GMT), the blue-chip Dow futures were up 175 points, or about 0.7%, the S&P 500 futures rose 17 points, or around 0.6%, while the tech-heavy Nasdaq 100 futures indicated a gain of 56 points, or roughly 0.8%.

In earnings, Under Armour (NYSE:UAA), Activision Blizzard (NASDAQ:ATVI), Occidental Petroleum (NYSE:OXY), Shopify (NYSE:SHOP), Dean Foods (NYSE:DF), Groupon (NASDAQ:GRPN), Molson Coors (NYSE:TAP), Akamai Technologies (NASDAQ:AKAM), and Twilio (NYSE:TWLO) are among the major companies due to publish their latest quarterly figures.


Elsewhere, European stocks were higher, with nearly all major bourses across the continent in positive territory. Among national indices, Germany's DAX and Britain's FTSE 100 were both up around 1%.

Earlier, shares in Asia closed broadly higher, with stocks in Japan leading gains in the region.

4. Powell Highlights Busy Day of Fed Speakers

A number of Fed speeches will capture the market's attention, as traders look for further hints on the outlook for monetary policy in the months ahead.

Most of the focus will fall on Fed Chair Jerome Powell , who will be speaking at the Hope Enterprise Corporation Rural Policy Forum, in Mississippi, at 5:45PM ET (22:45 GMT).

Speeches from Cleveland Fed President Loretta Mester and Kansas City Fed President Esther George are also on the agenda for today.

Market expectations for a Fed rate hike this year are hanging by a thread, according to Investing.com's Fed Rate Monitor Tool, after the U.S. central bank last month pledged to be patient with further rate hikes.

No major economic reports are expected this morning.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was little changed at 96.87, holding close to its 2019 high.

In the bond market, U.S. Treasury prices inched lower, pushing yields a tad higher across the curve, with the benchmark 10-year yield rising to 2.64%.

5. May to Give Parliament Brexit Update

Prime Minister Theresa May will tell British lawmakers they must hold their nerve over Brexit to force the European Union (EU) to accept changes to the divorce deal that would pave the way for an orderly exit.

"The talks are at a crucial stage," May will tell parliament later today, according to remarks supplied by her Downing Street office. "We now all need to hold our nerve to get the changes this House has required and deliver Brexit on time."

The U.K. on course to leave the EU on March 29 without a deal unless May can convince the bloc to reopen the divorce deal she agreed in November and then sell it to skeptical British lawmakers.

The EU has refused to reopen the Brexit divorce deal, though May insists she can get legally binding changes to replace the most contentious part of the Irish border 'backstop', the main hurdle to a Brexit deal.

Sterling was marginally lower at $1.2842 (GBP/USD).

-- Reuters contributed to this report


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