Wall Street futures edge higher as investors welcome phase-one U.S.-China trade deal

U.S. stock futures

U.S. and China sign phase-one trade agreement

U.S. stock futures advanced early Thursday after President Donald Trump and Vice Premier Liu He of China signed a phase-one trade deal at the White House on Wednesday, easing tensions between Washington and Beijing.

China agreed to purchase about $200bn worth of U.S. products over the 2020-21 two-year period, including almost increasing its farm purchases to $40bn. The deal also commits China to create strong new protections for intellectual property and trade secrets.

In exchange, the U.S. agreed to lower tariffs on some Chinese goods and call off duties that were set to go into effect in December. However, tariffs on $360 billion worth of Chinese goods imported into the U.S. will remain in place.

Trump hailed the deal as “a momentous step, one that has never been taken before with China, towards a future of fair and reciprocal trade.”

In a letter addressed to Trump and read by Liu He, Chinese President Xi Jinping said that completing the first phase of the trade pact was “good for China, the U.S. and for the whole world”

As of 4:20 a.m. ET, the blue-chip Dow futures were seen rising 84.5 points, or 0.29% to 29,113.5. The S&P 500 futures rose 10.37 points, or 0.31% to 3,304.12 while the tech-heavy Nasdaq 100 futures gained 36.88 points, or 0.41% to 9,096.88.

Crude futures turn higher buoyed by trade deal and slump in U.S. inventories

Crude futures also jumped on Thursday morning, supported by the signing of the U.S.-China trade deal and a bigger-than-expected slump in U.S. crude inventories.

The Energy Information Administration (EIA) said on Wednesday crude inventories dropped by 2.5 million barrels for the week ended January 10 to 428.5 million barrels. Analysts surveyed by Reuters had projected a drop of 474,000 barrels.

By 4:20 a.m. ET, U.S. West Texas Intermediate crude futures were at $58.23 per barrel, up 42 cents, or around 0.73%. International Brent crude oil futures climbed 64 cents, or about 1% at $64.64 a barrel.

Morgan Stanley, CSX, PPG earnings on tap

Meanwhile, Morgan Stanley (NYSE: MS) is set to announce fourth quarter earnings before the opening bell today.

Analysts expect the nation’s fourth largest bank to post earnings of $1.03 per share on $9.78 billion revenue. The stock was down 0.17% to $52.85 in premarket trading hours.

Bank of New York Mellon (NYSE: BK) will also publish its quarterly earnings ahead of the bell. Other earnings to watch today include CSX Corp (NASDAQ: CSX), PPG Industries (NYSE: PPG), and Charles Schwab (NYSE: SCHW).

U.S. retail sales in focus

Investors are also awaiting U.S. retail sales data for December, which will be released by the Commerce Department at 8:30 a.m. ET.

Analysts expect headline retail sales to have increased by 0.3% last month, compared with a rise of 0.2% in November. Core retail sales, which exclude volatile auto and gas, are projected to have risen 0.4% in December.