Global Markets Mixed, Recession Fears Drive U.S. Futures Lower, Trade Concerns Continue To Dampen Spirits

Global markets are mixed as trade war fears mount and signs of global recession increase.
Thomas Hughes

The U.S. Futures Are Down In Early Trading

The U.S. futures are down in early trading as trade concerns weigh on the outlook. The Dow Jones Industrial Average is down -0.54% in the early pre-market session while the S&P 500 and NASDAQ Composite are closer to -0.60%. Along with trade, growing protests in Hong Kong have increased fear of a global recession. Protestors and police clashed in Hong Kong over the weekend as the tenth week of unrest came to a close.

Morgan Stanley’s chief strategist rattled investors when he said the cyclical bear is still alive and kicking. In the note, he cites last week’s failed breakout in the S&P and warns investors to be ready. Goldman Sachs lowered its GDP outlook for the 4th quarter to 1.8% citing the impact of trade war uncertainty. In trade news, the PBOC set the midpoint above the psychological 7.00 level for the third day.

In stock news, shares of Sysco are moving higher in early trading. The food purveyor says EPS and revenue are up on strong demand. Barrick Gold reported a solid increase in YOY production and double last years EPS. Strength was aided by rising gold prices and is expected to persist into the current quarter. Shares of Tyson Foods were down in early trading following a devasting fire at one of its beef processing facilities.

Europe Moves Lower As Uncertainty Builds

Markets in the EU were up in early trading but reversed the gains by midday. The CAC and FTSE are both down about -0.45% while the DAX is posting a smaller loss. Banks are in the lead with an average decline of -1.3%, Deutsche Bank is the biggest loser at -3.8%. Friday’s motion for a vote of no-confidence in the coalition government by Italy’s Prime Minister is also a burden for investors to bear.

Shares of Tullow Oil moved to the top of the rankings despite the negative market sentiment. The company reported a major new discovery in Guyana and had shares move up more than 17%. In trade news, investors are expecting the trade talks to continue in Washington next month. The bad news is that Trump does not appear ready to make a deal. Analysts believe the trade deal won’t be struck until 2020 right ahead of the election.

Asian Market Move Higher Despite Trade Fears

Most markets in Asia closed higher on Monday despite trade war fears. The Shanghai Composite led with a gain of 1.45% while the Kospi and ASX both closed near break-even. The Hong Kong Hang Seng shed -0.44% after the Hong Kong Airport was shut down. The move is due to rising violence on the island city-state and had a profound impact on Cathay-Pacific. Shares of the airline fell more than -4.0% on the news. The Japanese Nikkie is closed for a holiday.

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