Markets Move Lower, Trade Doubts Resurface, Hong Kong Protests Drag On Asia

Global markets retreat on trade uncertainty and upcoming testimony from Jerome Powell.
Thomas Hughes
Hong Kong anti-extradition protests

The U.S. Futures Are Down In Early Trading

The U.S. futures are down in early trading as trade-related doubts resurface. News coming out of the White House suggests the two sides are at an impasse over tariffs. While China wants Trump to remove the threat of future tariffs and roll back September tariffs the U.S. President is not so amenable. Even so, Trump continues to confuse investors saying in a speech on Tuesday he was ready to make a deal. The NASDAQ Composite is down -0.40% in early trade, the Dow Jones Industrial Average and S&P 500 are close behind.

In today’s news, traders are waiting for key testimony from Jerome Powell. The Fed Chief is expected to comment on the state of the U.S. economy before the Joint Economic Committee. Traders will be on the lookout for any indications the FOMC is on track to cut or hike rates. October’s CPI figures came in a bit on the hot side and point to no further cuts this year. October CPI came in at 0.4%, a tenth hotter than expected and up 1.8% YOY.

European Markets Are Lower At Midday

European markets are broadly lower at midday on Wednesday. The German DAX is in the lead with a loss of -0.60% while the FTSE 100 and CAC are posting losses about half as big. The move is driven by increasing uncertainty the Phase 1 trade deal will come to pass and aided by weak CPI. CPI in the UK came in at 1.5%, a tenth slower than expected and a three-year low. In other economic news, EU Industrial Production came in at 0.1% and slightly better than expected.

In stock news, shares of bank stocks are leading the market lower. Bank stocks are down more than -2.0% after an ECB report shows the EU’s peripheral nations are taking market share from their more developed neighbors. Shares of F&B stocks are up 0.7%. Shares of energy firm Tullow are down more than -20% after cutting guidance for the full year.

Asian Markets Post Deep Declines

The Asian markets posted deep declines on Wednesday after escalating protests in Hong Kong threaten to destabilize the city-state. The Hong Kong Hang Seng is down -1.82% at the end of the day while most others posted losses in the range of -0.85%. In stock news, shares of Hong Kong insurer AIA led the market with a loss of -3.24% while in Japan Fast Retailing fell -1.83%.

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