Global Stocks Mixed, Trade Deal In Focus, Retail Earnings Surprise Wall Street

Global equities indices are mixed following Monday’s Wall Street rout as traders await new details on the soon-expected trade deal.
Thomas Hughes
Wall street in New York

Asian Markets Were Mixed In Tuesday Trading

Asian markets were in Tuesday trading with mainland China in the lead. The Shanghai Composite closed the day with a gain of 0.88% with the Shenzen component advancing nearly 3.0%. The move comes as the Chinese Peoples Congress begins and Premier Li Keqiang issues a warning to the people. He says China faces a “though struggle” in the face of a “more complicated environment”. The warning comes with a downgrade to 2019 GDP but one fully expected by the market. China now expects to see official GDP figures come in between 6.0% and 6.5% for the year, the slowest pace of growth since 1990.

Elsewhere in the region trading was less buoyant as investors wait on trade-related news. In Hong Kong stocks were up a little more than 0.1% while most others closed with losses. The Japanese Nikkei shed -0.44% led by a -1.78% decline in Softbank while the Korean Kospi fell al little more than -0.50% on weakness in shares of SK Hynix. The Australian ASX posted a slightly smaller loss, about -0.30%, following the latest policy statement from the RBA. The RBA has held rates steady with a warning economic slowdown may last longer than expected.

European Markets Mixed As Politics Takes Center Stage

The EU equities indices were mixed in early Tuesday trading as politics takes center stage. Uncertainty over the U.S./China trade deal and the Brexit is coming to a crescendo. Both issues may be advancing in a positive manner, trade more so than Brexit, but there is no guarantee yet either will be resolved. The UK FTSE 100 was in the lead as UK and EU officials meet once again in Brussels. The meeting is another in a series of attempts to smooth the wording of key issues of Theresa May Brexit Deal so the MPs will be able to reach consensus. The DAX and CAC were both down about -0.25% at midday.

In stock news shares of telecom companies were up about 1.0%. The move was driven by Vodaphone’s announced issuance of 4 billion in mandatory convertible-bonds. Shares of German chemical company Evonik advanced 4.0% on an announced divestiture of non-core units. Debenhams, a retailer, warned it would not meet a recently issued revenue guidance and shares fell -8.0%. Eurofins also moved lower, nearly -10.0%, on word it would reduce CAPEX M&A activity this year.

The U.S. Markets Are Flat Following Monday’s Rout

U.S. futures trading was indicating a flat open for the major indices on Tuesday morning. Traders are waiting for news on trade and on edge following Monday’s fall from key resistance targets. Secretary of State Mike Pompeo has gone on the record saying the two sides are on the cusp of a deal but still no details to soothe frayed market nerves.

Later today economic data in the form of services PMI and New Homes Sales may move the market.

In the meantime, traders will be focusing on retail earnings which are due out this week. So far the results are better than expected and this morning report from Target is the same. The company reports a solid top and bottom line beat that was driven by better than expected comps and a 25% increase in digital sales. The news was well received and helped shares of the stock advance more than 6.0% in premarket trading.

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