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U.S. Core Inflation Ticks Higher, FOMC Meeting Underway, Trade Talks Scuttled

Global equities are mixed as traders wait on a very important FOMC decision due out tomorrow afternoon. Oh, and there are a lot of important earnings due out after the close of today’s trading.
Thomas Hughes

Futures Fall As Markets Wait On Fed Decision

The U.S. futures are lower in early Tuesday trading as market participants wait on this months much anticipated FOMC decision. The Fed is largely expected to cut rates by a quarter-point tomorrow afternoon but there is a risk in that hope. Not only is the U.S. still fundamentally economically healthy today’s PCE data does not support cutting. Headline income and spending figures were as expected and came with some downward revision to previous data. The key read within the report is always the inflation data. On the inflation front, headline consumer prices held steady while core-consumer prices ticked up by a tenth.

The NASDAQ Composite is in the lead in early trading with a loss of -0.70%. The tech-heavy index is under added pressure from Apple traders, Apple is expected to report earnings today after the close of trading. The broad-market S&P 500 is runner up with a loss near -0.45% while the Dow Jones Jones Industrials trails with a loss of -0.35%.

In earings news, Under Armour reported this morning and did not please investors. The sportswear company says U.S. sales were weak, the news sent shares down more than -12.0% because the company’s expansion plan is not working. Consumer products company Proctor&Gamble reported strong earnings and revenue sending its shares up in early trading.

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EU Markets Tank As The No-Deal Brexit Becomes More Likely

EU markets are broadly lower as earnings and Brexit fears grip the market. On the Brexit front, newly-elected UK PM Boris Johnson says the May Brexit Deal is dead. He’s requested the EU renegotiate and says there will be a no-deal Brexit if they won’t. The British Pound fell to a fresh 28-month low in response.

The UK FTSE surprisingly fell the least, shedding only -0.15% in early trading. The German DAX is more than -2.0% lower at midday, the French CAC nearly -1.50%. Shares of energy giant Centrica are near the bottom of the rankings. The company says it produced a net-loss this quarter and that its CEO will be stepping down. British Petroleum reported EPS and revenue above expectations and sent its shares up nearly 3.0% while Lufthansa shares fell more than -5.0%.

Asia Edges Higher, Trade And FOMC In Focus

Asian markets are broadly higher after the Tuesday session. Gains in the region run from 0.25% to 0.45% for the Korean Kospi. Traders are hopeful the FOMC will move to stimulate the U.S. economy and that trade talks will bear fruit. Unfortunately, on the trade front, Donald Trump may have scuttled any chances for a deal this week. The U.S. president says China doesn’t live up to its promises.

The BOJ decided to hold interest rates steady at their meeting overnight. The bank says though, that is will not hesitate to lower rates and stimulate the economy if momentum toward the 2.0% inflation target wanes.

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