U.S. To Impose Tariffs On The EU, EU PMI Falls, Asian Markets Dive On Global Growth Fears

The U.S. Futures Are Down In Early Thursday Trading

The U.S. futures are indicating a lower open in early Thursday trading. The move is driven by a souring outlook for global economic growth. This week’s U.S. Manufacturing PMI and an untimely ruling from the WTO threaten to plunge the world into recession.

The WTO ruled in favor of the U.S. regarding EU subsidies for Airbus and has given the green light on up to $7.5 billion in annual tariffs. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite had all been higher in the earliest hours of Thursday trading but gave up those gains to trade just shy of break-even.

U.S. tariffs on EU goods will go into effect on October 18. Tariffs will be on Airbus aircraft, the root of the issue, as well as some whiskeys and cheeses among other items. The ruling concludes years of litigation but may not settle the long-running dispute. The EU has already threatened it may retaliate and up the stakes in the global trade war. Later today, traders will be looking out for the ISM Services PMI for any signs of weakness. Tomorrow the NFP will be front and center in traders’ focus.

In stock news, shares of Tesla are moving lower in early trading. The company reported a net increase in deliveries for the period but failed to match expectations. Shares are down -5.0%. Constellation Brands is down -4.0% after it reported weaker than expected 3rd quarter results.

EU Markets Are Mixed

The EU markets are volatile and mixed at midday on Thursday as traders seek certainty in an uncertain world. The DAX is trading near break-even while the FTSE is down about -0.90% and the CAC is up about 0.35%. Signs of global slowing are weighing on sentiment and those signs are not limited to the U.S. Today’s EU composite PMI came in at 50.1 showing very little expansion within the broad economy. Within that, PMI from Germany and France were also weaker than expected. Services was also weak falling near 2 points to 51.6.

Asian Plunges On Global Slowdown

Asian markets are down hard on weakening global economic activity. China, Hong Kong and South Korea were closed for holidays leaving the Nikkei and ASK the only major indices open for trading. Both those markets shed more than -2.0% on fear U.S. tariffs on EU goods will plunge the world in to the long-feared recession. Traders should be cautioned that the data, while weak, is still positive. There is no recession at hand just yet. When it comes, if it comes, the market is likely to already have corrected.