Global Equities Rise, Trade Fears Ease, Data In Asia Is Better Than Expected

Global markets extend last week’s rally as trade tensions ease.
Thomas Hughes
New York Stock Exchange building

The U.S. Futures Are Up In Early Monday Trading

The U.S. futures are indicating a modestly higher open in early Monday trading. The major indices are expected to open with gains between 0.55% to 0.65% led by the NASDAQ. The move was spared by easing trade tensions between the U.S. and Mexico and further supported by data in Asia.

The U.S. and Mexico inked a deal over the weekend that puts off tariffs indefinitely. Mexico has agreed to bolster security along its southern border, about 1/4 the length of the U.S./Mexico border, in efforts to stem the flow of Central American Refugees. President Trump says he has full confidence Mexico will be able to follow through on their pledge.

In stock news, shares of Raytheon and United Technologies shot to the top of the rankings after they announced a merger. The two will merge in an all-stock deal producing a defense/government contractor with revenues topping $74 billion annually. Shares of GM and Ford, heavily exposed to the threat of Mexican tariffs, also rose in early trading. In economic news, there is no data due out today. Data this week includes PPI, CPI, Retail Sales, Consumer Sentiment, and Business Inventories.

European Markets Rise As Trade Fears Ease

European markets are trading mostly higher as global trade tensions ease. The German Dax is today’s laggard trading near break-even, the French CAC is up about 0.35% and the FTSE 0.60%. Traders are eyeing what look like positive developments in terms of global trade but concerns are still present. Trump and Xi are slated to meet later this month at the G-20 meeting. U.S. Secretary of State Steve Mnuchin has said Trump is prepared to raise tariffs if Xi won’t deal.

In economic news, the UK GDP revision was weaker than expected. The read shows the UK economy contracted at a rate of -0.4% for the month, four times the expectation. On a year over year basis, UK GDP is still positive but also weaker than expected. In Brexit news, the UK is on track to sign a Free Trade Agreement with South Korea. The deal is intended to maintain current relations once the Brexit is completed.

Asian Markets Up On Positive Data

Asian market were broadly higher after a round of positive data. The Hong Kong Hang Seng led with a gain of 2.25% while most others closed with gains between 0.85% and 1.35%. The move was sparked by a positive revision to Japanese GDP that was later compounded by better than expected Chinese trade figures. Chinese trade figures show exports rose more than expected and imports fell more than expected. The data shows a strong demand for Chinese goods despite trade tensions and is good news for the global market.

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