Trade Deal Reached, Doubts Remain, Data Comes In Strong

The U.S Futures Are Up In Early Trading

The U.S. futures are up in early trading. The market is buoyed by last week’s trade announcement, the Phase One Trade Deal is good news. Despite this, doubts are lingering due to vagueness on some key points. For one, the amount and timing of China’s agricultural purchases are hazy. For another, there has been no mention of the U.S. trade deficit with China and opening Chinese markets.

Regardless, investors are choosing to focus on the good including Trade Ambassador Robert Lighthizer’s comment to the effect the deal was totally done. Secretary of the Treasury Steve Mnuchin says the deal will be inked in January. The Dow Jones is up 0.20% in early trading due to weakness in Boeing. The S&P 500 and NASDAQ Composite are both up about 0.50%.

In stock news, Boeing is down more than -4.0% after news leaked it was considering halting or curbing 737-Max production. On the economic front, the Empire State Manufacturing Survey came in at 3.5 versus the expected 3.1. Later in the session traders will be looking out for Flash PMI for the U.S. and the Home Builders Index.

EU Markets Are Mixed, The UK Leads

The EU markets are up although the gains are not equal. The DAX and CAC are up 0.75% and 1.10% while the FTSE leads with an advance of 2.35%. The markets are supported by the trade news, the UK is supercharged following Boris Johnson’s sweeping win last week. Johnson’s Conservative Party adds 109 seats to their hold on Parliament securing a clear and decisive victory. This means the Brexit will move forward swiftly and cleanly but more, Britain’s Conservative leadership will likely spur a new round of growth.

In stock news, Basic Resources are in the lead with gains near 2.6%. Shares of Tullow Oil are down -9.0% after news emerges of more trouble at the Ghana operation. On the economic front, EU flash PMI came in at 50.6 as expected. What was not expected was accelerated slowing in the manufacturing sector. The services sector expanded more than expected to offset the difference as it becomes a more crucial portion of the EU economy. In the UK, both manufacturing and services PMI contracted putting the nation on the path for 4th quarter contraction.

Asian Markets Are Mixed On Monday

Asian markets are mixed on Monday despite positive data from China. Chinese Industrial Production and Retail Sales came in above expectations for the month and accelerating on a YOY basis. The news has the Shanghai Composite up about 0.56% while most others in the region closed with modest to moderate losses. The Australian ASX is the only other index to close with an advance and that 1.63%. The isolated nation is a key trading partner with both the U.S. and China.