U.S. Futures Rise On Cyber Monday, Tariff Threat Looms Large, China Manufacturing Activity Accelerates

Global markets are mixed on Monday after global trade relations took a turn for the worse.
Thomas Hughes
Wall street in New York

U.S. Futures Rise As Traders Hope for Santa Rally

The U.S. futures are indicating a positive open for the major indices on Monday. The move is driven by hopes Santa Claus will bring another rally this year. The S&P 500 advanced more than 3.25% in November and many think the gains have just begun. Despite this, the threat of tariffs still looms large over the market.

In today’s news, President Trump reinstated tariffs on metals from Argentina and Brazil citing the impact of currency devaluations. On the China front, relations seem to have stalled yet again. Chinese officials demand tariffs be canceled for the Phase One deal to move forward. At the same time tensions over Hong Kong and the U.S. support of democracy efforts are still simmering in the background.

On the economic front, traders will be looking out for ISM manufacturing data and Construction Spending figures due to be released at 10 AM. There were no significant earnings reports released today, the next earnings cycle begins in late January.

European Indices Are Mixed On Monday

The European markets are mixed on Monday. The lack of progress on Phase One of the U.S./China trade deal along with the renewal of tariffs on some South American metals is to blame. The French CAC is in the lead with a loss of -0.33% while the DAX and FTSE trail with declines of -0.15% and -0.05%. Metals are in the lead despite the general air of caution. Shares of ArcelorMittal and Glencore are both up about 1.5% on the tariff news.

Shares of Lufthansa are also on the move at midday. There is news of a possible stake by Qatar Airlines and that has the stock up about 2.0%. At the other end of the spectrum, shares of Deutsche Bank are down on news the U.S. is stepping up its investigation of links to money laundering. In the UK, it is only 10 days until the snap-parliamentary elections. The results are tilted in favor of Boris Johnson, a victory for him means certain Brexit for the UK.

Asian Markets Up On Chinese Data

The Asian markets are in the lead on Monday with gains across the board. The Japanese Nikkei made the strongest advance, 1.01%, driven surprisingly by positive data out of China. Both Chinese gauges of Manufacturing PMI came in above expectations, above the previous month, and in expansionary territory. The indications are still weak but show signs of stabilization within China’s slowing economy. Elsewhere in the region, markets closed with gains in the range of 0.15% to 0.40%.

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