Equities Rebound, Trump Supports Market, Trade Worries Linger As Impact Of Tariffs Spread

The U.S. Futures Are Up In Early Trading

The U.S. futures are up in early trading following comments from President Trump. Trump says the trade war may end soon, good news indeed, but the claim is not supported by China’s posturing. China has taken a protectionist stance and increased the odds the trade war will last much longer than expected. The Dow Jones Industrials, the S&P 500, and NASDAQ Composite were all indicated up about 0.65% in premarket trading.

The comments from President Trump sparked some volatility in the market. The bad news is that the indices are likely to give up those gains very soon. For the trade war to end soon either Trump or Xi will have to make concessions neither looks likely to give. Trump has thrown out another carrot in an effort to entice Xi to the negotiating table, he says Huawei could benefit from a trade deal.

Energy and tech were the worst hit by trade news this week. The energy sector is looking at losses near -3.5% for the week while tech is down a slightly less-robust -2.8%. The chips were the hardest hit sub-sector, down -5.5% on the threat the trade war will become an all-out tech war.

Theresa May Resigns As UK Prime Minister

European markets were also largely higher in Friday trading. The major indices are all up about 0.80% at midday. The moves are driven by trade optimism regardless of the risk that is still present and despite political uncertainty in the UK.

In today’s Brexit news, Prime Minister Theresa May resigned her post effective June 7. The move is due to mounting opposition to her Brexit deal and opens the door for a new PM to make a deal. The problem is that the EU has said many times the deal in place is the only deal there is so it is unclear what a new PM will be able to accomplish. The only alternatives are a hard-Brexit or a May-Brexit short of the country backing out of its EU exit plans.

In stock news, there were some big moves in today’s action. Shares of French retailer Casino shot to the top of the charts after its parent company received protection from creditors. Casino shares gained 15% on the news. Shares of CNH advanced 4.0% on word it would initiate a share buyback program. Shares of Mueller Maersk gained 1.3% after its EPS was reported in-line with expectations.

Asia Mixed, Trade Worries Simmer

Asian markets were mostly flat and mixed on Friday.  The biggest move was posted by the Korean Kospi and that is -0.70%. The Australian ASX shed -0.55% and the Nikkei -0.16% while indices in China made small gains. The Hong Kong Hang Seng gained 0.32%, the Shanghai Composite 0.02%.