Traders Are Cautious On Monday, Three Days Until UK Election, Weak Data In China Weighs On SentimentTraders are cautious on Monday with an important vote in the UK and a tariff deadline for China on the calendar.
The U.S. Futures Are Edging Lower On Monday
The U.S. market is edging lower on Monday morning. Traders are cautious ahead of two important global events scheduled for later in the week. In the UK, on Thursday, the people will flock to the polls to vote in a snap election. The election is intended to break a deadlock in Parliament and will have long-lasting repercussions on global economics. If incumbent Prime Minister Boris Johnson cements his advantage in Parliament a smooth Brexit is likely to occur sometime in early January. If not the three-year-old stalemate will continue.
In trade news, the deadline for a Phase One Trade Deal is this Sunday. If a deal is not reached it is likely another round of tariffs will be imposed on Chinese goods. With China’s exports falling another -1.1% over the last month another round of tariffs could break the countries economy. The Chinese Commerce Minister says China is eager to make a deal as soon as possible. White House Chief Economic Advisor Larry Kudlow says the two sides are getting closer and closer. Kudlow qualified his comments though saying Trump is ready to walk away if key demands are not met.
The Dow Jones Industrial Average and S&P 500 are both down about -0.05% in early Monday trading. The NASDAQ Composite is leading the market with a loss of -0.11%.
Europe Moves Lower On Weak Chinese Data
The European markets are moving lower at midday on Monday. The CAC is in the lead with a loss of -0.40% while the DAX and FTSE trail at -0.15% and -0.10%. The moves is due to the weak data from China. This month’s decline in Chinese exports is the fourth consecutive month of declines, analysts had been expecting a small increase.
In stock news, shares of Tullow Oil are down -60% at midday following news the CEO was stepping down. The news was accompanied by reports the company was experiencing problems with operations in Ghana as well. Shares of Osram Licht are up 14.5% after AMS revealed its takeover bid was successful. Shares of AMS fell -3.0% on the news. Carl Zeiss Meditec is also moving higher on Monday. The company received an upgrade to buy from Deutsche Bank.
Asia Mixed, Data In Focus
Asian markets are mixed at the end of trading on Monday. Most indices closed with a gain but none were large. The Hong Kong Hang Seng shed -0.01% while the Shanghai Composite posted an advance of only 0.08%. The Australian ASX, Nikkei and Korean Kospi all gained about 0.35%. In Japan, GDP for the third quarter came in at 1.8% and well above the expected 0.2%. While good news, the 3rd quarter number is likely impacted by the tax hike that went into effect in the 4th quarter. The 4th quarter GDP numbers are expected to be weak because of it.