Global Markets Edge Higher, Trade Hopes Lift Sentiment, Fundamental Economic Issues Remain

Global markets try to move higher on Monday but the gains are uneven as trade woe, politics and data weigh on sentiment.
Thomas Hughes
Bull market, Financial and business concept
Bull market, Financial and business concept

The U.S. Markets Are Edging Higher On Monday

The U.S. equities markets are indicated to open slightly higher on Monday as trade hopes lift sentiment. News China had offered to purchase U.S. agricultural products in exchange for eased restrictions on Huawei is seen as a sign a trade deal is possible. The news is positive for the market but far from ending the trade war.

The Dow Jones Industrial Average leads the market in early trading with a gain of 0.25% while the S&P 500 and NASDAQ Composite trail. The NASDAQ Composite is showing a small loss near -0.15%. The S&P 500 is about 1.6% from it’s all-time high and may reach that level this week. Traders are cautioned not to be overly bullish until new all-time highs are set and maintained, until then, there is a risk of a double-top at the current all-time high.

Financials are among today’s best performers. The group is up an average 0.5% despite mounting odds of another two or three FOMC rate cuts this year. This week’s economic calendar is full and includes reads on producer and consumer level inflation, retail sales, small business, and the labor market. Cracker Barrel, Kroger, and Oracle are all slated to report earnings later this week.

EU Market Are Mixed At Midday

The EU indices are mixed at midday despite optimism over trade. The DAX is the only index to show a gain and 0.35% at that. The FTSE and CAC are both lower and led by the FTSE. The FTSE is down about -0.65% as the Brexit Drama draws out. In today’s news, MPs are trying to force PM Boris Johnson to honor a new measure to prevent a hard, no-deal Brexit. It is unclear who will win the battle of powers, the new PM or Parliament, but the 5-week pre-Brexit hiatus of Parliament begins tomorrow.

In stock news financials were strong in the EU. Danske Bank rose a solid 5.5% with others in the group advancing more than 3.5%. Air France KLM, however, did not see its shares rise. The last month’s traffic figures were weaker than expected and traders sent shares down nearly -9.0% because of it.

Asian Markets Mixed, China’s Exports Drop Unexpectedly

Asian markets were mostly higher if a bit mixed at the end of Monday’s session. The Shanghai Composite leads with a gain of 0.84% with the Nikkei and Kospi both closing up about 0.55%. The moves were driven by a series of economic data that includes a weak GDP revision in Japan and an unexpected decline in Chinese Exports. Chinese Exports shrunk -1.0% versus an expected gain of 2.0%, largely due to the impact of the ongoing trade war.

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