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U.S. Futures Up As G-20 Starts, Trump/Xi Meeting In Focus, Banks Lead Gains

By:
Thomas Hughes
Published: Jun 28, 2019, 12:56 UTC

Global markets are mixed as the G-20 meeting starts. Trump and Xi are expected to meet, there is hope a truce will be reached, but traders are cautioned not to expect too much, too soon.

E-mini Dow Jones Industrial Average

Futures  Are Up As The G-20 Meeting Starts

Futures are up modestly in early trading as the G-20 meeting gets underway. The meeting, held in Osaka, Japan, is expected to produce trade-related headlines centered on a meeting between Presidents Trump and Xi. While no binding deal is expected there is a high-likelihood a truce in the trade war could be reached. Trump is also expected to speak with Japanese President Shinzo Abe in an effort to smooth trade relations with that nation. The Dow Jones Industrial Average is looking at a gain near 0.25% at the open, the S&P and NASDAQ Composite are not far behind.

The banks are leading in early Friday trading with an average gain near 1.5%. The U.S. Federal Reserve Bank released the results of the latest stress test and all 18 U.S. banks passed. The banks have been raising their dividends and increasing their share repurchase plans with Goldman Sachs and JP Morgan leading the pack. Goldman Sachs increased its dividend nearly 50%, JP Morgan by 12.5%.

Shares of Proctor&Gamble are up 1.5% in early trading after receiving an upgrade. The upgrade, from Goldman Sachs, is to buy from neutral citing growth expectations and consumer strength. On the economic front, Personal Income and Spending data was released at 8:30 AM. Income came in at 0.5%, better than expected, while spending held steady at 0.4% with positive revisions to the previous month. The PCE Price Index shows core inflation rose 1.6% YOY, as expected.

Europe Edges Higher With Trump/Xi Meeting In Focus

European markets were modestly higher in early Friday trading as investors wait on news from the G-20. The DAX was in the lead at midday with a gain of 0.50% while the FTSE 100 and CAC were both trailing at 0.25% and 0.35% respectively. Shares of Deutsch Bank were among the top movers after its U.S. branch passed the Federal Reserve stress test. Credit Suisse, however, was moving lower because its U.S. arm did not meet up to the Federal Reserve standard.

Shares of entertainment giant Merlin were up more than 14% on news it would be acquired by Lego’s founding family and Blackstone Investment Group. Merlin is the operator of Madame Tussaud’s Wax Works Worldwide.

Asia Markets Move Lower Ahead of G-20 Meeting

Asian markets closed lower on Friday as worry over the G-20 meeting capped the market. While there is growing hope a truce will be reached there is no guarantee. One pundit has put forth the U.S./China trade war could linger for up to 15 years even if a truce is reached now. The Australian ASX led with a loss of -0.71% followed closely by the Shanghai Composite’s -0.60% decline. The Japanese Nikkie, Hong Kong Hang Seng, and Korean Kospi all fell about -0.20%.

About the Author

Thomas has been a professional options trader and investor since October 2005. At that time, Thomas was introduced to financial markets, technical analysis, and financial market analysis. He tracks economic data from the worlds leading economies, corporate earnings, equities, currency, commodities, and cryptocurrencies.

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