US pre-open: Stocks seen up amid US-China trade hopes

US stocks looked set for a positive start on the last trading day of 2018, with sentiment likely to be underpinned by signs of progress in Sino-US trade talks.

At 1050 GMT, Dow Jones Industrial Average and Nasdaq futures were up 0.9%, while S&P 500 futures were 0.8% higher.

Indications of improving Sino-US relations were set to provide some cheer after US President Donald Trump hailed trade progress over the weekend.

Trump tweeted on Saturday: "Just had a long and very good call with President Xi of China. Deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!"

After the tweet, the Wall Street Journal cited sources familiar with the negotiations as saying that Trump "may be overstating how close the two sides are to an agreement". However, a statement on Sunday from Lu Kang, the spokesperson for China’s foreign ministry, seemed to confirm Trump's trade optimism.

"China stands ready to work with the US to implement the important consensus reached by President Xi Jinping and President Trump in Argentinaa, expand co-operation on the basis of mutual benefit, manage differences on the basis of mutual respect," Lu said.

On the downside, however, investors will be mulling over the latest Chinese manufacturing figures. The National Bureau of Statistics’ official manufacturing purchasing managers’ index printed at 49.4 this month from 50.0 in November, falling short of expectations for a reading of 49.9 and marking the lowest level since February 2016.

Meanwhile, the sub-index for total new orders declined to 49.7 in December from 50.4 the month before, moving into contraction territory and hitting its lowest level since February 2016, while the sub-index for production fell to 50.8 from 51.9 in November.

Mike van Dulken, head of research at Accendo Markets, said the data "may fan the flames of concern about slowing global growth".

Meanwhile, the US government shutdown entered its second week as Trump and the Republicans remained at odds over funding for his Mexican border wall.

On the data front, the Dallas Fed manufacturing business index for December is at 1530 GMT.