US pre-open: Stocks set for slightly higher start, Morgan Stanley shuns US equities
US stock market futures were pointing to a slightly higher open in the States on Monday, following 'constructive' trade talks between the US and China at the weekend and a small interest rate cut by the People's Bank of China overnight.
Commenting on the implications of the latter, IG's Josh Mahony said: " A key interest cut in China provided another reason for optimism today, with the PBoC trimming the 7-day reverse repurchase agreements rate by 5-basis points.
"For markets, this cut is as much about proving that the PBoC remain accommodative, with further easing likely in the event of continued weak growth."
Against that backdrop, as of 1149 GMT, futures on the Dow Jones Industrials were pointing to an opening gain of 79.0 points to 28,032.0, alongside an advance of 6.25 points to 3,124.0 for the S&P 500 and a rise of 22.25 points to 8,341.0 for the Nasdaq-100.
Wall Street's main market gauges had finished at record highs during the previous session after US national economic advisor, Larry Kudlow, told Fox Business that talks for a preliminary trade deal with Beijing were in their final stages.
To take note of, in a research note sent to clients, analysts at Morgan Stanley predicted that equities in the Rest of the World would outperform stocks in the US, with so-called 'value' stocks set to outperform 'growth'.
In the same note, which saw the investment bank upgrade its view on shares in Europe, Japan and emerging markets, the strategists told cliuents to "focus on where valuations are reasonable and 2020 earnings are achievable."
The economic calendar was relatively sparse on Monday, with only the National Association of Homebuilders's Housing Market Index and the Treasury's international capital monthly flows report set for release at 1500 GMT and 2100 GMT, respectively.
Meanwhile, and among the corporate names that were set to update investors at the start of the week were Agilent, Intuit and Jack in the Box.