Asia Mixed On Trade Hangover, Autos Drag EU Lower, US Market Braces For Data

Asian Markets Were Mixed As Trade-Truce Reality Set In

Asian markets closed Tuesday mixed after the realities of the trade-truce set in. The truce is a major step forward and reprieves for a tired market but a long way from a lasting deal. The deal at best is a temporary agreement to halt minor skirmishing while both sides prepare for the big battle. Pundits have pointed out a number of glaring dissimilarities in the two sides wants and needs that promise turbulent talks ahead.

The Japanese Nikkei led the losses with a decline of -2.4%. The island nation was further impacted by weakness in the automotive sector stemming from the Carlos Ghosn scandal. Nissan’s board is set to meet as early as today to decide the fate of its CEO. Shares of Nissan were down -1.81%. The ASX and Kospi both posted losses as well while the China-focused Shang Hai Composite and Heng Seng Index made small advances.

Autos Drage The EU Lower As Trade Concerns Resurface

The auto sector drug on EU indices as trade concerns resurface. The sector is among those most affected by the US trade policy and suffered heavy losses in the wake of Monday’s big rally. Shares in the sector fell an average -2% to -4% by midday and did not look like they were finding any support.

The cause for the weakness is mounting confusion about what, exactly, does the truce mean? Details from no two sources match the other leaving market watchers uncertain about the timeline and substance of plans to move forward with trade talks. The major indices were all down in response with losses ranging -0.70% to -0.80% for the DAX, FTSE, and CAC by late morning.  

The US Markets Brace For Data, Traders Wonder Who Will Lead The US Trade Delegation

The US market was indicated down in early premarket trading on a number of concerns. The number one, of course, is trade and more specifically, who will lead the US delegation. Robert Lighthizer is the obvious choice but Larry Kudlow and Peter Navaro are also on the short-list. Whatever the outcome, the US team is sure to include all three.

On the economic front, the US markets are bracing for another big round of key data. There is no data scheduled to be released today but there is quite a bit of it due out this week including the monthly NFP report and the FOMC Beige Book. The NFP is expected to show job gains continued to grow at a pace near 200,000 with rising wage inflation, as is the Beige Book, both of which are expected to lead the FOMC to hike rates in December. The NASDAQ Composite led the early decline with a loss of only -0.35% with the others closer to -0.20%.