US pre-open: Futures point to early gains despite stimulus stalemate, trade tensions

Wall Street futures had stocks opening higher ahead of the bell on Monday despite a continued stalemate between lawmakers in regards to further stimulus payments and heightened tensions between Washington and Beijing.

As of 1245 BST, Dow Jones futures were up 0.23%, while S&P too and Nasdaq-100 futures had the indices opening 0.33% and 0.68% firmer, respectively.

The Dow closed just 34.30 points higher on Friday as the blue-chip index flirted with an all-time high for most of the week but fell short.

Monday's main focus will likely be much the same as it was in the prior week, with investors firmly focussed on stalled talks around another batch of Covid-19 stimulus payments to US citizens.

Democrats proposed to send more than $900.0bn to states and municipalities in a single bill, while a counteroffer from the Republican Party made no mention of any additional aid for states and local governments.

Also weighing on the sentiment was US-Sino trade relations after Donald Trump issued an executive order on Friday forcing ByteDance to sell or spin off its US TikTok unit within three months. The president cited "credible evidence" that ByteDance could "take action that threatens to impair the national security of the United States".

CMC Markets' David Madden said: "Equity markets are showing modest gains this morning despite the concerns about the coronavirus crisis and the heightened tensions between the US and China. It has been a quiet start to the week in terms of volatility as it seems that traders are unsure which way to turn.

"The relationship between China and the US has been under pressure recently as the tit-for-tat consulate closure spat, coupled with the US worries that Beijing is tightening their control over Hong Kong has been playing on dealers’ minds. Trade talks between the two countries were cancelled and that has added to the frosty situation. The lack of agreement between Republicans and Democrats in relation to the stimulus deal remains a concern too."

In terms of the coronavirus itself, the US reported over 42,000 new cases on Sunday, a marked drop from the 64,000 recorded on Friday, according to John Hopkins University.

On the macro front, August's Empire State Manufacturing Index will be posted at 1330 BST, while this month's NAHB Housing Market Index will follow at 1500 BST.

In corporate news, Trinity Biotech and GNC Holdings will both report earnings on Monday.