Investing.com - Here are the top five things you need to know in financial markets on Thursday, April 5:
1. Stocks bounce on hopes for trade compromise
After U.S. stocks ended the prior session with a strong move higher, global stocks seemed to also accept the narrative that the U.S. and China would be able to avoid an all-out trade war. U.S. President Donald Trump’s chief economic advisor Larry Kudlow downplayed the idea that the world’s two largest economies would further up the ante and insisted that the two sides would work on negotiations and there was time to avoid the implementation of recently announced tariffs.
“There is no trade war here,” Kudlow insisted, adding that Trump was determined to resolve the issue with the least amount of pain possible.
Wall Street’s turnaround on Wednesday seemed to spark relief in other global equities that have recently been under extreme volatility with movements higher or lower depending on interpretations of the status quo. Asian shares bounced from two-month lows on Thursday, recovering from a selloff triggered by escalating Sino-U.S. trade tensions.
The negotiation narrative was also credited with the relief rally in Europe with stock markets in London, Frankfurt, Paris, Madrid and Milan all sporting gains of more than 1% on Thursday.
U.S. futures pointed to a continuation of the upward move on Thursday. At 5:51AM ET (9:51GMT), the blue-chip Dow futures gained 41 points, or 0.17%, S&P 500 futures rose 9 points, or 0.33%, while the Nasdaq 100 futures traded up 33 points, or 0.49%.
2. Dollar pushes higher as trade war fears ebb
The dollar pushed higher against major rivals on Thursday amid hopes that the U.S. and China will reach a compromise to overcome rising trade tensions.
At 5:52AM ET (9:52GMT), the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, inched up 0.09% at 89.86.
Adding to Kudlow’s remarks that China and the U.S. would work on negotiations, reported “progress” on tri-lateral talks on the North American Free Trade Agreement (NAFTA) with some suggesting that Trump may ease his stance on one of the sticking points.
With trade tensions apparently cooling, currency traders will turn their attention to the release of weekly jobless claims at 8:30AM ET (12:30GMT) on Thursday. The release comes ahead of the widely anticipated monthly jobs report on Friday.
3. Former Fed chair Yellen hints at 3 to 4 rate hikes ahead of Powell appearance
Former Fed chair Janet Yellen said that she felt three to four rate hikes this year would be likely.
According to Reuters’ overnight report, the former U.S. central bank chief made a paid appearance to discuss the economy and interest rates at an event hosted by investment bank Jefferies that included a sit-down dinner for forty.
Yellen also reportedly commented that recent US tax cuts and a boost in government spending poses at least some risk of running the economy hot.
The report arrives ahead of an appearance by her replacement; current Fed chairman Jerome Powell is scheduled to speak about the economic outlook at the Economic Club of Chicago on Friday at 1:30PM ET (17:30GMT).
The Fed hiked rates last month and stuck to its projection for two more rate hikes this year, implying a total of three increases in 2018. Markets currently price in the possibility of four hikes this year at just over 30%, according to Investing.com’s Fed Rate Monitor Tool.
4. Facebook rebounds after Zuckerberg call with reporters
Shares of Facebook (NASDAQ:FB) gained around 2% in pre-market trading on Thursday, after chief exec Mark Zuckerberg held a conference call with reporters after the prior session’s close.
Zuckerberg admitted that the personal information of up to 87 million users, mostly in the United States, may have been improperly shared with political consultancy Cambridge Analytica, up from a previous news media estimate of more than 50 million. Shares in the social media company had tumbled more than 16 percent since the Cambridge Analytica scandal broke.
“We have to go through every part of our relationship with people, and make sure that we're taking a broad enough view of our responsibilities,” Zuckerberg said on the call, referring to Facebook’s intention to respond to recent user privacy issues.
Notably, Zuckerberg said there was no "meaningful impact" to advertisers or users from the burgeoning "Delete Facebook" movement that swept the globe urging users to cancel their accounts.
Zuckerberg will testify next week before congressional committees over a political consulting firm's misuse of customer data to interfere in the U.S. presidential election. He will appear before a joint hearing of the U.S. Senate Judiciary and Commerce committees on April 10 and the U.S. House Energy and Commerce Committee on April 11.
5. Oil struggles for direction
Oil prices pared overnight gains in early morning trading on Thursday as investors struggled to take positions in the commodity.
Official U.S. data released a day earlier showed an unexpected decline in inventories stateside that none-the-less was unable to push oil into the black immediately following the report.
Traders have been struggling to decide between bullish and bearish positions as they weigh the rise in U.S. shale output against the possibility of an extension in the deal from the Organization of the Petroleum Exporting Countries’ and Russia to curb production and end a global supply glut.
U.S. crude oil futures edged forward 0.03% to $63.39 at 5:53AM ET (9:53GMT), while Brent oil rose 0.12% to $68.10.