Markets Waver, Sentiment Sours, Conflicting Trade News Heightens Uncertainty

Global markets tread water at new highs while conflicting trade news weighs on sentiment.
Thomas Hughes
Bull Market Trend Cast In Gold

The U.S. Markets Waver In Early Monday Trading

The U.S. futures market wavered in early Monday trading after conflicting trade news heightened uncertainty. Last week, Senior Economic Advisor Larry Kudlow said the U.S. and China were close to reaching a Phase One Deal. Over the weekend, that news was seemingly confirmed by China’s state-run news agency. The Xinhua News Agency reported constructive trade talks between Lui He and Steve Mnuchin concerning core differences. Today, reports have leaked Chinese senior officials are pessimistic a deal will be reached. At stake now, China’s purchases of U.S. agriculture products and rollback of U.S. tariffs on Chinese goods.

The Dow Jones Industrial Average had been up about 0.25% in early trading. That move reversed to a loss of -0.20% after the negative trade news. The S&P 500 and NASDAQ Composite are also both indicated to open slightly lower. In earnings news, the 3rd quarter earnings season is largely over. More than 95% of the S&P 500 have reported earnings, the bulk of companies left are in the retail sector. This week, traders will be on the lookout for reports from Home Depot, Lowes, TJ Maxx, Kohls, Urban Outfitters, and L Brands. In economic news, no major reports were released today. Later in the week traders will be watching for housing starts/building permits, the FOMC minutes, and leading indicators.

Europe Is Mixed, Trade And Politics Confound Market

European indices had been marginally higher going into the midday hour. The indices gave up their gains after the negative trade news was released. The DAX is in the lead with a loss of -0.60% while the CAC is close behind. The UK FTSE 100 is hovering near break-even while traders wait on key speeches from PM Boris Johnson and his main rival. The two are expected to address the Confederation of British industry, Johnson is expected to reiterate his commitment to taking the UK out of the EU.

In stock news, financials are in the lead at midday with gains near 0.60% while autos lag with a loss of 01.50%. Shares of Spanish bourse BME are up 37% following a takeover bid by Swiss market SIX. Insurer Aviva is down more than -4.25% after it affirmed staying in Asia despite a review of business operations.

Asian Market Mostly Higher On Trade Hopes

Asian markets are mostly higher at the end of the session on Monday. The Hong Kong Hang Seng led with a gain of 1.35% despite ongoing violence in the region. The Australian ASX and Korean Kospi both posted small losses, less than -0.10%, while the Nikkei and Shanghai both advanced about 0.50%.

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