S&P 500 Futures refresh record high as Sino-US trade optimism adds to risk-on mood

• S&P prints four-day winning streak to mark all-time high near 3,440.
• China-US statements on phase one deal add to the market optimism earlier backed by the coronavirus related news/headlines.
• Wall Street keeps cheering hopes of easy money ahead of the key Jackson Hole Symposium.

S&P 500 Futures is on the bids near 3,438 during the initial hour of Tokyo open on Tuesday. The risk barometer recently refreshed the record high to 3,439.62 while extending the biggest run-up of 2020 on a weekly basis.

Reuters’ piece conveying the dialogue between the trade representative of the US and China becomes the latest to empower the bulls. “The US Trade Representative Robert Lighthizer and his Chinese counterpart Liu He see progress on phase one trade deal and are committed to taking steps necessary to ensure the success of the agreement,” said the news.

Earlier, the receding numbers of the coronavirus (COVID-19) cases in Australia, China, Japan and the US gained support from hopes of vaccine/treatment to propel the risk-on momentum. In doing so, market players ignored comments from the American health official Anthony Fauci that challenges the Trump administration’s rush for the vaccine. It should also be noted that headlines suggesting Japan’s ease of ban on foreign resident’s arrival offered extra strength to the market optimism.

On the contrary, India’s moves to cut China’s Huawei from the world’s second-largest mobile market and US Secretary of State Mike Pompeo’s hardstand to keep Israel safe were challenges to the risk-on mood that seemed to have been ignored.

Against this backdrop, the US 10-year Treasury yields gain 1.1 basis points (bps) to 0.657% whereas Japan’s Nikkei 225 rise over 1.30% to cross 23,300 by the press time.

Considering the lack of major data/events during the Asian session, the market’s upbeat mood is likely to prevail unless any surprise risk pops-up.  That said, US Consumer Confidence and housing numbers will decorate the calendar during the later part of the day.