Global Markets Edge Higher, Trade Talks Are Back In Focus, Risk Of Recession Remains High

The U.S. Futures Are Moving Up In Eary Trading

The U.S. futures are moving higher in early Tuesday trading. The NASDAQ Composite in the lead with an advance of 0.50% while the Dow Jones and S&P 500 are both up about 0.35%. The move comes just a day after the markets advanced a little more than 1.0% and may lead the indices higher over the next trading session.

The trade war is firmly back in focus after President Donald Trump revealed China’s top officials had called the White House. According to him, China and the U.S. are ready to renew trade negotiations although the details are murky. Chinese Foreign Minister Geng Shuang says he is unaware of any phone calls while the Editor-in-Chief of state mouthpiece The Global Times also disputes the calls.

In stock news, Johnson & Johnson was in the spotlight after a judge awarded less-than-expected damages to the plaintiff in an opioid-centered case. The award is for $572 million, about 3.15% of the asked-for $18 billion, The news has shares of JNJ up about 1.50% in early trading. Shares of JM Smuckers are also on the move and to the downside. The packaged-foods conglomerate says weak pricing for coffee and peanut butter along with competition in the dog food segment caused them to miss estimates for both revenue and earnings. That stock is down nearly -5.5%.

EU Markets Edge Higher Despite Weak Data

The EU markets are mostly higher at midday on Tuesday despite weaker than expected data from Germany. In Germany, GDP in the 2nd quarter did not grow or shrink, GDP is 0.0% and well below the expected 0.4% YOY. Worse, on a quarter to quarter basis GDP fell -0.1%. The news is only the latest to show weaker than expected growth in the EU related to the trade war. The upshot is that it helps ensure the ECB and the German government will produce some form of stimulus in the next 30-45 days.

The DAX is in the lead at midday with a gain near 080%. The CAC is close behind at 0.50% while the FTSE trails with a gain near 0.05%. Autos are among the days top performers. The sector is supported by news from China. China is considering relaxing some restrictions on automobile ownership in an effort to spur consumption. In local news, France’s Macron was able to reach a compromise with President Trump over the digital tax staving off retaliation from the U.S. President. In Italy, there is a word the two main opposition parties may be forming a coalition to start a new government. If so I would expect the union to fail in short order.

Asian Markets Broadly Higher

Asian markets are broadly higher after Tuesday’s session. The Shanghai Composite is the leader with a gain of 1.35%, the Nikkei is runner-up with a gain of 0.96%, and most others followed with gains near 0.50%. The Hong Kong Hang Seng is the only index to post a loss. Autos are among the day’s leaders, up an average 0.75%, following the news China may reduce auto-ownership restrictions.