Small Business Optimism Drives Growth, FOMO Strikes Market, Trade Deal Questionable

Global markets edge higher as traders await a key speech from U.S. President Donald Trump.
Thomas Hughes

The U.S. Futures Are Flat In Early Tuesday Trading

The U.S. futures are indicating a flat to a slightly positive open for the market on Tuesday.  Market sentiment is buoyed by optimism a Phase 1 trade deal will soon be signed but gains are capped by uncertainty. The two sides have indicated tariffs will be rolled back but President Trump’s comments cast more than a shadow of doubt on the outlook. Trump says he has not agreed to roll back tariffs, something traders hope will be clarified later today. Trump is expected to deliver a speech before the Economic Club of New York. His topic is U.S. trade policy.

In economic news, the National Federation of Independent Businesses released its monthly survey this morning. The NFIB Small Business Survey rose 0.6% to 102.4 as small businesses move on from fear of recession to plans for 2020 expansions. Eight of the ten sub-components made positive contributions including plans for hiring. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all up about 0.5% in early trading.

European Markets Move Higher, UK Election Takes New Turn

The European markets are modestly higher on Tuesday as trade hopes fuel investor appetite. On the trade front, EU pundits expect U.S. tariffs on autos will be delayed by six months but there is no official word on that yet. The DAX, FTSE 100, and CAC are all up 0.20 to 0.50%.

In Brexit news, the Brexit Party has agreed to stand aside from 317 seats in an attempt to aid Boris Johnson’s bid for a clear majority. With Johnson’s Conservative Party leading in the polls, it seems as if this move guarantees a win for him and Brexit.  UK Unemployment fell to 3.8% over the last month while wages grew 3.6%. The 3.6% wage increase is a solid gain but less than the market was expecting.

In stock news, shares of Iliad are up 17% at midday because the French telecom beat consensus estimates and announced a new share buyback program. Telecoms are up 1.1% on the news. In other news, insurers are edging lower.

Asian Markets Edge Higher On Tuesday

Asian markets are mostly higher on Tuesday as trade jitters weigh on sentiment. The Nikkie and Kospi both closed with gains near 0.80% while the Shanghai Composite and Hong Kong Hang Seng posted smaller gains. Shares of Tencent are among the days leaders with a gain of 1.80%. The Australian ASX is down about -0.30%.

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