Investing.com - Here are the top five things you need to know in financial markets on Monday, August 20:
1. Global Stocks Gain Ahead of U.S.-China Trade Talks
Global stocks were higher, with investors awaiting the outcome of trade talks between the United States and China later this week, which markets hope will lead to an easing of their trade disputes.
The talks are reportedly set to take place in Washington through Wednesday and Thursday, shortly before new U.S. charges on Chinese goods take effect.
Most Asian bourses closed with gains, with shares in mainland China faring the best, as the Chinese yuan rallied away from recent low levels.
The Shanghai Composite Index ended up 1.1%, after falling to a two-year low on Friday, while the yuan reached its highest in a week as Beijing acted to prevent a test of the psychologically important 7.0000 level.
In Europe, nearly all of the region's major bourses were trading higher, with most sectors in positive territory, as appetite for riskier assets improved on hopes of a trade war thaw.
Among national indexes, Germany's export-heavy DAX outperformed, rallying by around 1%.
The upbeat mood looked set to carry over to Wall Street, with major indexes poised to open near multi-month highs.
The blue-chip Dow futures were up 70 points, or around 0.3%, at 5:35AM ET, the S&P 500 futures tacked on 6 points, or around 0.2%, while the tech-heavy Nasdaq 100 futures indicated a gain of 27 points, or roughly 0.4%.
The second quarter earnings season has wound down, but results this week are expected from a few mall-based retailers, including Target (NYSE:TGT), TJX (NYSE:TJX), Kohl’s (NYSE:KSS), L Brands (NYSE:LB), Gap (NYSE:GPS) and Foot Locker (NYSE:FL).
2. PepsiCo to Buy SodaStream in $3.2 Billion Deal
Beverage and snack giant PepsiCo (NASDAQ:PEP) announced plans to acquire at-home carbonated drink-maker Sodastream (NASDAQ:SODA) for $3.2 billion, as it seeks an edge in health-conscious beverages in its battle with chief rival Coca-Cola.
Under terms of the agreement, PepsiCo will acquire SodaStream for $144 per share in cash, representing an 11% premium to Friday's closing price of $129.85.
Tel Aviv-based SodaStream, which makes machines that turn tap water into carbonated water, will help diversify PepsiCo's portfolio of snacks and beverages.
The Purchase, NY-based group will use cash on hand to fund the acquisition.
The deal is expected to close in January.
3. Dollar Rises at Start of Busy Week
Away from equities, the U.S. dollar pushed higher against a currency basket, buoyed by expectations for trade talks that investors hope will ease tensions between the U.S. and China.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged up 0.2% to 96.21, after falling 0.5% on Friday, the largest one-day decline in almost a month.
In the bond market, Treasury prices rose, pushing yields lower across the curve. The benchmark 10-year yield dipped to 2.86% while the 2-year yield slipped to 2.61%.
The dog days of August could be volatile this year, with Fed-related headlines set to dominate in the week ahead.
Global financial markets will be fixated on the annual meeting of top central bankers and economists in Jackson Hole, Wyoming, where Fed Chairman Jerome Powell speaks Friday.
There is also the release of the minutes from the Federal Reserve's last meeting on Wednesday.
The Fed has signaled to markets it will hike interest rates two more times this year, in September and December.
Against this backdrop, the U.S. central bank is shrinking its balance sheet by allowing maturing securities to roll off its balance sheet without replacing them.
4. Metals Leads Commodities Higher
In commodity markets, gold put in an impressive performance, bouncing back after suffering its largest weekly loss since May 2017 last week.
The precious metal jumped nearly 1% to $1,194.90 an ounce.
Gold fell 2.2% last week, marking the sixth consecutive weekly decline. It was also the worst weekly performance since December.
Industrial metals, such as copper, were also higher as the potential for a breakthrough in the trade standoff between China and the U.S. boosted appetite for growth-linked assets.
Oil prices also started the week on the front foot, though gains were limited amid worries over a slowdown in global demand.
5. Greece Finally Emerges from Bailout Program
After a nearly nine-year debt crisis that shrank the economy by a quarter and forced it to implement painful austerity measures, Greece has successfully exited its final, three-year bailout program, agreed in August 2015, the euro zone's ESM rescue fund announced.
The crisis has proven deeply traumatic for Greeks who had enthusiastically swapped drachmas for euros in 2001.
Since the debt crisis exploded in early 2010, four successive governments have fought to keep bankruptcy at bay, relying on the biggest bailout in economic history, more than 260 billion euros lent by Greece's euro zone partners and the IMF.
Athens will now be able to tap financial markets to fund its activities, marking the closure of the European sovereign debt crisis after Portugal, Ireland and Spain came back from the brink.