A trade deal between Canada and the US rocked markets as both countries came to a long awaited deal to replace the NAFTA agreement. US stock index futures soared in the premarket and indicated a positive open of more than 200 points. The new deal is expected to be named the Unites States-Mexico-Canada Agreement or USMCA according to senior officials and give more market access to US dairy farmers whilst Canada has had automobile exports to the US capped. Formalities and signatures are expected by the end of November where it would be passed through the legislative process.
Markets reacted to the news positively as the Dow +0.73%, S&P 500 +0.36% whilst the Nasdaq finished lower down 0.11% following a slump in Facebook shares down 1.23% and Intel Corp down 1.78%. Trade sensitive shares, Boeing closed the session higher by 2.79% and was also the best performer on the Dow lifting the overall index. Chevron shares closely followed higher by 1.73% on the back of higher oil prices – Brent crude oil settled at $84.98 a barrel higher by 2.7%. Beneficiaries of the higher oil prices were energy stocks like Hess Corp +4.21% and ConocoPhillips +3.20% and as such the Energy sector was the best performing sector on the S&P 500 higher by 1.43%. Laggards of the day included the Real Estate and Utilities sectors lower by 0.85% and 0.30%, respectively.
Moving away from the general trend on the market, Tesla shares closed higher by 17% after closing down 13% on Friday following the SEC’s pursuit of Elon Musk. The CEO has agreed to the terms set out by the SEC which involves both Tesla and himself paying $20 million in fines along with a three year ban from being chairman, however Musk will remain as CEO. General Electric shares rose 7.1% after the company removed CEO John Flannery and replaced him with former Danaher CEO Lawrence Culp after the board becoming increasingly frustrated with the slow pace of change under Flannery – according sources familiar with the matter.
- Reserve Bank of Australia cash rate decision at 2:00pm
Chart of the Day: Boeing Co (BA) Daily Chart