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Trade Uncertainty Spikes, Global Markets Fall, FOMC Minutes On Tap

Global markets fall as trade fears escalate. The Phase One Deal is on the brink of collapse and so is the equities market.
Thomas Hughes
Man walking past the Federal Reserve Bank of New York

Futures Fall, Trade Fears Escalate

The U.S. futures market is indicating a lower open on Wednesday after President Trump escalated fear the Phase One Trade Deal is on the rocks. President Trump, at a Cabinet Meeting, says if China doesn’t make a deal by the December 15th deadline he will raise tariffs even higher. This news compounds word released earlier this that China’s top officials are pessimistic a deal will be struck. Traders need to be prepared for negative trade news at any time. When and if it comes the broad equities market is likely to fall sharply. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all down about -.30% in early trading.

In stock news, shares of Target and Lowes are moving higher after the release of 3rd quarter earnings reports. Target easily surpassed expectations and raised its full-year guidance sending shares up by 8%. Shares of Lowes are up 4.5% despite a shortfall in revenue. Traders are focused on Lowes’ fundamental outlook and an expectation of revenue growth in 2020. Later today, traders will be on the lookout for the November FOMC minutes. The minutes are not expected to alter FOMC outlook but, even so, may shed light on their next move.

European Markets Fall With All Sectors And Bourses In The Red

The EU markets are in the red on Wednesday morning after President Donald Trump threatened to increase tariffs on China. The news is not good for an economy desperately in need of growth. The news may cap gains in the near term. The UK FTSE 100 is in the lead with a loss of -1.00% while the DAX and CAC trail at -0.70% and -0.35% respectively.

In economic news, the ECB released its quarterly stability report and cited risks to the economy. According to the central bank risk-taking in the financial sector and declining profitability among banks is a threat to the economy.

In stock news, shares of Microfocus are up 4.0% after the company reaffirmed full-year guidance. Shares of Nexi are also moving higher after the financial institution announced a possibly strategic partnership with Intesa Sanapaolo. At the other end of the spectrum, shares of Kingfisher are down -6.7% after it reported a decline in YOY same-store sales.

Asia Moves Lower, Tariff Threat Looms

Asian markets moved broadly lower on Wednesday as tariff threats and disintegrating trade talks loom over the market. The Australian ASX led with a loss of -1.35% and in turn led by the financial sector. Australia’s banking index fell more than -2.0%. The Korean Kospi is a close second at -1.30% while the Nikkei, Hang Seng and Shanghai Composite all fell about -0.70%.

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