Futures Fall Despite Solid EPS, Retail Sales Miss, Brexit Deal Remains Elusive

Futures Fall As Worries Creep  Back Into Focus

The U.S. equity market is indicated lower in early Wednesday trading despite signs 3rd quarter earnings are better than expected. The Dow Jones Industrial Average and S&P 500 are both indicated lower by 0.20% while the NASDAQ Composite is down about -0.30%. The move is driven by growing concern China will not follow through on its pledge to buy more U.S. agricultural products. If this is the case it is likely additional tariffs will be enforced later this year. China has pledged as part of the Phase I trade deal to buy up to $50 billion in U.S. products.

In earnings news, financial stocks Bank of America and Bank Of New York Mellon both reported better than expected EPS. Both companies reported strength in consumer segments that helped drive share prices higher. Shares of BAC are up more than 2.5% while BNY-Mellon is up about 1.5%. In economic news, Retail Sales were weaker than expected. September retail sales fell -0.3% versus an expected gain of 0.3%. The mitigating factor is an upward revision to the past month of 0.2%. Later in the session traders will have an eye out for the NAHB Index and the FOMC’s Beige Book.

Europe Mixed, Brexit Deal Is Still Elusive

European markets are flat and mixed at midday as traders fret over trade and the Brexit. On the trade front, China’s demands the U.S. remove the threat of more tariffs before signing the Phase I deal has thrown a wrench into the works. At this stage it is becoming less and less likely Phase I will come to fruition. In Brexit news, negotiations stalled on Wednesday despite a narrowing of differences. The Irish PM confirms the back-stop is yet to be resolved but there is hope. The two sides will begin a two-day summit tomorrow that will, hopefully, result in a deal.

The German DAX is in the lead at midday with a gain of 0.22% while the FTSE and CAC are both edging lower. In stock news, shares of UK tech giant Micro Focus is up 4.3% on its results as is seafood producer Mowi. At the other end of the rankings, IMCD and DBA Aviation are both down more than -4.0%.

Asia Mostly Higher On Brexit Hopes

Asian markets are mostly higher at the end of Wednesday’s session. The Nikkie and ASX are both up more than 1.0% while the Hang Seng and Kospi are up closer to 0.70%. The moves are driven by hope for a Brexit deal, however elusive it may seem right now. In Hong Kong, leader Carrie Lam is under intensifying pressure as she rejects HK’s bid for autonomy. The Shanghai composite is the only index to move lower, it posted a loss of -0.41%.

Futures Rise, Earnings Season Off To Shaky Start, Trade Concerns Dampen Investor Appetite

The U.S. Futures Are Rising In Early Trading

The U.S. indices are indicated higher in early trading as earnings season kicks off. Today’s news includes reports from more than a half-dozen important names and the results are mixed. The big banks are the main focus as JP Morgan, Goldman Sachs, Wells Fargo, and Citigroup all report. JP Morgan posted a nice beat on the top and bottom lines driven by strength in consumer lending. Citigroup, Goldman Sachs and Wells Fargo are all trading lower after reporting weaker than expected numbers.

In other news, United Health and Johnson & Johnson both beat expectations. Johnson & Johnson also reports strength in the consumer units while United Health upped its full-year guidance. Both stocks are moving higher by roughly 2.0%.

The Down Jones Industrial Average, S&P 500, and NASDAQ Composite are all up about 0.25% in early trading. The sentiment is buoyed by trade hopes but also tempered by caution. While China and the U.S. have signaled a Phase 1 deal is at hand there is still no deal in place. Until such time traders are cautioned to be prepared for negative headlines. On the economic front, the Empire State Manufacturing Survey rose modestly to 4 from last months 2.0 as production and employment edge higher.

European Markets Are Mixed, Hope For A Smooth Brexit Persist

European markets are mixed at midday on Tuesday after remarks from the EU’s Brexit team renewed hope. Michel Barnier said that despite the increasing difficulty it is still possible to reach a deal this week. The DAX and CAC are both up about 0.35% to 0.40% while the FTSE is down roughly -0.25%. Retail is in the lead with a gain of 0.90%.

In economic news, unemployment ticked higher in the UK. The 3rd quarter figure came in at 3.9%, a tenth higher than the previous. In stock news, shares of Hays are up 5.5% after it reported flat results. The good news is weakness in the UK was offset by strength in offshore markets. Share of Wirecard, however, are not so buoyant. The Financial Times did an expose on the company’s accounting practices and shares are down -17% because of it.

Asia Mixed, Trade Hopes Clash With Trade Fears

Asian markets are wildly mixed after Tuesday’s session. The Japanese Nikkei led the market with a gain of 1.9% after being closed Monday for holiday. Chinese indices are broadly lower following the release of inflation data. CPI rose 3% on a 69% increase in pork prices while PPI fell. The Shanghai Composite is down -0.56% on the news, the Hang Seng a more tepid -0.07%. Elsewhere in the region, the ASX and Kospi are both up mildly.

Futures Fall As Uncertainty Grips The Market, Brexit Deal Elusive, China Trade Data Falls

The U.S. Futures Are Down In Early Trading

The U.S. futures are down in early trading despite positive developments on trade. The Dow Jones Industrial Average, NASDAQ Composite, and S&P 500 are all down about -0.55% in early trading. Tech is in the lead. The trade deal, announced on Friday, is an interim stop-gap measure intended to produce a three-phase solution. The first phase includes China increasing its purchases of agricultural products, a pledge the country has made several times in the past. In exchange, the U.S. will postpone or delay tariffs scheduled to take effect later this week.

While both sides have hailed the deal as good there is still no actual document and details are sketchy. China’s Vice Premier Liu He says he will be back to Washington this month to hammer out those details before President Xi will sign any deal. China is expected to purchase up to $50 billion in U.S. agriculture products with those purchases ramping up over the next few weeks. The timeline to end the trade war is now 15 months. Secretary of the Treasury Mnuchin says the October tariffs will go into effect in December if China reneges on its agreements.

In business news, this week begins the peak of 3rd quarter earnings. We are expecting reports from the big banks this week, they are expected to post EPS declines. In economic news, we are expecting several key reads from the Federal Reserve. Also on tap, Retail Sales, the Beige Book, Housing Starts, and the Index of Leading Indicators.

European Indices Are Down With A Case Of Uncertainty

EU indices are down at midday due to a growing case of uncertainty. The trade-deal that is not yet a deal remains a key point of uncertainty as does the Brexit. Brexit negotiators were unable to reach a deal over the weekend raising doubts a solution to the Irish-Backstop can be found. The Queen is expected to deliver her speech to open Parliament today. In it, she will outline the governments plans for Brexit.

The French CAC is leading decliners in early trading with a loss of -0.75% while the DAX and FTSE are both trailing with losses close to -0.50%. In stock news, shares of biopharma company Chr. Hansen rebound 3.8% after last week’s massive selloff.

Asian Markets Rebound Despite Trade Uncertainty

Asian markets are broadly higher after Monday’s session as trade hope fuels optimism. The Shanghai Composite and Korean Kospi both advanced more than 1.1% while the Hong Kong Hang Seng and Australian ASX gained 0.80% and 0.50%. Japan was closed for a holiday. In South Korea chipmakers Samsung and SK Hynix led the advance.

U.S. Futures Strongly Higher, Hopes For Brexit Deal Stoked , China Announces Financial Reforms

The U.S. Futures Are Ripping Higher

The U.S. equities futures are ripping higher in early trading following positive news regarding trade. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all up more than 1.0% in early Friday trading. The spark that ignited this move is positive news on trade, news that suggests a temporary deal may be reached sometime today. Yesterday, a Tweet from Donald Trump that the talks were going “really well” was compounded today by another source who says the talks went “probably better than expected”.

Chinese Vice Premier Liu He is expected to meet with Donald Trump in the Oval Office later today. During the previous negotiations session, such a meeting preceded important concession from both sides. In stock news, shares of FAANG stocks are up more than 1.0% while the financials are close behind. Investors are also closely watching earnings. Next week the big banks are slated to report and open peak earnings season.

Europe Higher, Brexit Deal In Sight

European markets are also moving higher in early trading. The DAX is up about 2.0% while the CAC trails with a gain of 1.0% and the FTSE lags at 0.60% In Brexit news, Irish PM Leo Varadkar said a deal might be clenched by the deadline after a meeting with UK PM Boris Johnson. The two are trying to work out a solution to the Irish-Backstop, it appears they have hit on a promising possibility. JP Morgan, in the wake of this news, raised their odds of a smooth Brexit from 5% to 50%.

In stock news, tech is in the lead at midday with a gain greater than 3.0%. At the other end of the spectrum, shares of ad-company Publicis are down -13% after cutting full-year guidance. Energy is also a strong performer in the early part of today’s session. Brent and WTI are both up nearly 2.0% after Iran reported one of its tankers was struck by missiles. The tanker was traveling close to Saudi shores, the Saudis have not made a comment but it is possible they are retaliating for damage done last month.

Asian Markets Move Higher

Asian markets closed higher on rising trade hopes. The Hong Kong Hang Seng led the day in Friday’s session with a gain of 2.34%. The move was boosted by a 4.5% increase in CNOOC, China’s national oil company. The Nikkei is in the runner-up position with a gain of 1.15% while most others in the region advanced 0.80% to 0.90%. In China, China’s financial regulator has laid out a timeline reducing and removing requirements for foreign financial institutions.

Futures Fall After Wild Session, EU Flat On Brexit Angst, Asia Rebounds On Trade Hope

The U.S. Futures Are Down After A Volatile Session

The U.S. futures are down after a wild overnight session. The Dow Jones was indicated up by triple digits after an initial report raised hopes for a trade deal. Later in the session, following a string of reports out of China, hopes faded as trade talks are seen stalling. The initial report is that President Trump would allow sales of non-sensitive equipment to Huawei. The later reports say talks have stalled due to a lack of progress. China won’t budge on forced technology transfers and demands the U.S. reverse a decision to blacklist 28 companies earlier this week.

Trade talks are still slated for today in Washington but it is unclear if progress will be made. Vice Premier Liu He is now expected to leave a day early. The Dow Jones Industrial Average is down about -0.20% while the S&P 500 and NASDAQ Composite are both down about -0.15%.

In economic news, the U.S. consumer price index was unchanged over the last month. Economists had been expecting a gain of 0.1%. This news ups the chances for an October rate cut but do little to alter the general outlook. The U.S. economy is still on solid footing.

European Markets Are Flat At Midday

The EU markets are flat and mixed at midday as Brexit angst and trade concerns weigh on sentiment. In Brexit news, negotiations have been delayed by a day and are expected to restart on Friday. The EU has told the UK that significant concessions must be made if there is to be a new deal before the October 31 deadline. The DAX and FTSE are both trading near 0.0% while the CAC is up about 0.25%.

In economic news, UK GDP came in at 0.3% in the last month versus an expected 0.2%. This news, along with a 0.1% upward revision to the previous month, greatly reduces the odds of a 3rd quarter recession. In stock news, shares of biosciences firm Chr. Hansen fell -13% after missing earnings estimates.

Asian Equities Rebound On Trade Hopes

Asian equities rebound on news the U.S. would ease restrictions on Huawei. The major indices closed with gains in the range of 0.0% to 0.78% and closed before reports that sent U.S. markets plunging. The only index to shed value in today’s session is the Korean Kospi, it fell nearly -0.90%. Trading in Korea was impacted by a -2.32% decline in Hyundai Motors. In Japan, factory orders fell for the 2nd month and threaten to extend a manufacturing recession in the country.

Futures Surge, China May Accept Interim Trade Deal, Don’t Expect The Trade War To End

The U.S Futures Are Up Sharply In Early Trading

The U.S. futures are up sharply in early trading. Reports from China suggest an interim trade-deal may be at hand. According to separate reports citing an unnamed official China is prepared to accept a partial deal. Their terms are if the U.S does not impose any more tariffs. The reports go on to say China will concede non-core issues but won’t budge on major sticking points.

Chinese officials are said to have “no optimism” regarding a broad trade deal or an end to the trade war. At best, traders can expect a new status quo to be put in place and for economic slowness while businesses adjust. The key takeaway is, however, that a measure of uncertainty may be removed from the market allowing economic expansion to resume.

The NASDAQ Composite is in the lead with a gain of 1.0% in early trading. Shares of Apple’s supply chain are, however, mixed in the premarket session. The S&P 500 is in second place with an advance of 0.90% while the Dow Jones Industrials are up about 0.75%. Later in the session traders will be on the lookout for the JOLTs report and Wholesale Trade at 10 AM.

Europe Up, Brexit Deal Is Still Elusive

European markets are up on trade hope despite the elusiveness of a satisfactory Brexit deal. In the latest news, PM Boris Johnson is facing mutiny from within his own party as the odds of a hard-Brexit increase. An offer from the EU to allow associated parties to exit the Irish-Backstop after a few years was rejected. The rejection by Northern Ireland is understandable but adds to frustrations. Both Johnson and his Irish counterpart have reiterated their desire for a deal.

In stock new, shares of GVC are up nearly 5% after the company increased its earnings guidance for the second time in three months. In other news, markets are expecting another rate cut from the FOMC after a speech by Jerome Powell on Tuesday. Powell says the Fed is prepared to act as necessary and may begin increasing the balance sheet again soon.

Asia Mixed Amid Growing Trade Uncertainty

Asian markets closed the day mixed because the session ended before the reports of China accepting an interim deal hit the wires. Traders in the region are concerned trade relations will not improve due to the U.S. blacklisting of 28 more companies and visa restrictions on official envoys. The U.S. move is in response to China’s alleged human rights violations targeting ethnic Muslims. This move is a counterpoint to China’s harsh backlash against the NBA for supporting the protests in Hong Kong.

The Nikkei is down about -0.60% on weakness in Tencent. The Shanghai advanced 0.39%. The Hang Seng shed -0.81% while the ASX fell -0.71%. The Korean Kospi led today’s session with a gain of 1.21%.

U.S. Markets Fall, Hopes For A Trade Deal Fade, BREXIT Talks Close To Failure

The U.S. Futures Moves Lower In Early Trading

The U.S. futures are moving lower in early Tuesday trading after a series of events led traders to believe U.S./China trade negotiations are going nowhere. On the U.S. side of the equation, the White House has expanded its blacklist of Chinese companies by 28. The move is intended to help protect Chinese Muslim minorities that are being persecuted in the country. On the Chinese side of the equation, China’s Sout China Morning Post reports that government officials have toned down their expectations for a deal. Further, Chinese representative Vice Premier Liu He will not carry the Special Envoy title signifying his official status in the talks.

The Dow Jones Industrial Average is in the lead with a loss near -0.29% while the S&P 500 and NASDAQ Composite are close behind. In economic news, September PPI was much weaker than expected and ups the odds for an FOMC rate hike this month. Headline PPI fell by -0.3% during the month leaving the YOY gain at only 2.0%. 2.0% is the Fed’s target rate but with the pace slowing, it is clear the economy is slowing. At the core level, PPI also fell -0.3%.

European Markets Fall As BREXIT News Fails To Soothe Frayed Nerves

European markets are also moving lower on Tuesday due to the downturn in trade hopes. The sentiment was further soured by news the BREXIT talks were close to breaking down. An expectation a solution to the Irish-Backstop had developed over the weekend but that is now dashed. With the BREXIT only three weeks away it is becoming increasingly likely there will not be a smooth transition.

The DAX is in the lead in early trading posting a loss of -1.05% despite better than expected IP numbers. Industrial Production in the EU’s largest economy rose 0.3% versus an expectation of 0.1%. The news suggests that Germany’s broader economy may avoid recession but concerns over slowing remain. The French CAC is also down about -1.05% while the UK FTSE 100 is trailing at -.035%.

Asian Markets Are Broadly Higher

Asian markets are broadly higher despite signs a trade deal between China and the U.S. will remain elusive. The Nikkei leads with a gain of 0.99% while most others advanced 0.25% to 0.45%. Analysts at JP Morgan are certain no deal will be made other than maintaining the current status quo. It is possible Trump will delay or suspend tariffs set to take effect next week but traders are cautioned not to put much hope in that outlook.

Futures Fall In Early Trading, Brexit Deal Is In Focus, Trade Talks To Take Place This Week

The U.S. Market Moves Lower

The U.S. market is moving lower in early Monday trading as caution takes center stage. Traders will be watching a number of key economic releases as well as trade talks slated for Washington D.C. The Dow Jones Industrial Average, the S&P 500, and NASDAQ Composite are all down about -0.25% in the premarket session. The industrial stocks are in the lead, the XLI Industrial SPDR is down about -0.50%.

In economic news, this week’s calendar will bring us CPI and PPI as well as the JOLTs report and FOMC minutes. On the inflation front, traders will be looking for signs of clarity regarding the Fed. The Fed is expected to cut rates later this month but the outlook is cloudy. While activity is slowing and inflation is running cool, the labor markets are still strong. The NFP data reveals underlying strength in the U.S. The FOMC may cut rates one more time before the end of the year but the odds for two are well below 50%.

In trade news, deputy-level talks will be held in Washington this week. China is sending Vice Premier Liu He who has already said China will not agree to the broad reforms President Trump is asking for.

Brexit Deal In Focus, Expect Big News By The End Of The Week

EU markets are slightly higher in early Monday trading as hopes for a smooth Brexit intensify. The UK FTES is in the lead at midday but the gain is small, only about 0.25%, while the DAX and CAC are close behind. In Brexit news, UK PM Boris Johnson’s solution to the Irish-Backstop was met with some optimism. While there is no indication it will be accepted leaders in the EU have embraced it with an open mind. France’s Macron says the EU Council will make its decision by the end of the week.

In economic news, German Industrial Orders fell again and more than expected. The news is the latest indication the German manufacturing recession will continue for another month. On the consumer front, Sentix Consumer Sentiment fell to -16.8 from -11.1 as trade woes and economic slowdown drag on outlook. In stock news, shares of HSBC moved higher after the company said it would cut up to 10,000 jobs in an effort to control costs.

Asia Mixed, Trade Is In Focus

Asia markets are mixed after Monday’s session. The Chinese and Hong Kong markets are still closed for holidays. The session was led by Korea and Australia which gained close to 1.0% and 0.70%. Japan trailed with a loss of -0.16%. Investors are hopeful an interim deal will be reached between the U.S. and China. One trader put the odds at 40% for an interim deal and 60% for the October 31st tariffs to be delayed.

Strong Data Lifts U.S. Stocks, Global Markets Mixed, Rates Cuts In Focus

Strong NFP Data Lifts U.S. Stocks

Some strong labor data has the U.S. market moving higher in early trading. The futures had been down but better than expected unemployment figures and solid jobs gains reversed sentiment. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite had all been down marginally but are now up about 0.20%.

The NFP data shows 136,000 new jobs were added in September, analysts had been expecting a number closer to 145,000. Within the report, unemployment fell -0.2% to a 50-year low and the labor force participation rate increased showing new workers are finding jobs faster than they are entering the market. Average hourly earnings fell by a penny which is a concern but this is offset by the 2.9% YOY gain. With more and more younger workers entering the labor force it is possible the average earnings could tick lower.

The NFP data is especially important because of the FOMC and rate-cutting outlook. The poor ISM readings from earlier this week increased the odds of future rate cuts, this new data does not support that outlook. The CME’s FedWatch Tool now shows about an 80% chance of a cut at the next meeting.

EU Markets Are Flat In Early Trading

The EU markets are flat in early trading as global growth worries, central bank outlook, and Brexit drama weigh on sentiment. In local news, UK PM Boris Johnson continues to face intense pressure at home but there appears to be a ray of light regarding his Brexit plan. European Council President Donald Tusk says he is open to Johnson’s Irish-Backstop solution but not convinced. Regardless, it is the first and only sign that Theresa May’s Brexit deal can be renegotiated.

The DAX is trailing in today’s market and hugging the flat line. The French CAC is up about 0.20% while the UK FTSE is in the lead with a gain near 0.30%. In stock news, shares of BP are up about 1.0% after it announced its CEO would be stepping down.

Asian Markets Mixed, Hong Kong Protests Escalate

Asian markets are mixed on Friday after an escalation of protests in Hong Kong. The protests have reached a level forcing HK’s leader to enforce martial law and ban face masks within the city-state. Shares of Hong Kong-listed stocks led the rout with a loss of -1.10% while most others traded closer to break even. The Korea Kospi is the only other to fall in Friday trading losing -0.55%. The ASX and Nikkei are both up about 0.35%.

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.

Weak Data Slams Stocks, Johnson-Backed Brexit Deal To Be Rejected, U.S./China Trade Talks Are Next Week

The U.S. Indices Are Down On Weak Data

The U.S. futures are down in early trading as weak data slams the market. Yesterday’s ISM Manufacturing data set the stage for possible U.S. recession. Today’s ADP confirms a general slow-down in the labor markets. Traders are cautioned not to read too much into the data, manufacturing is only 10% of the entire U.S. economy and labor markets remain healthy. The Dow Jones Industrial Average, S&P 500 and NASDAQ Composite are all down about -0.45% in the premarket session.

In stock news, shares of FAANG stocks are down -0.75% to -1.0% while Caterpillar and Union Pacific are both down slightly more than -1.0%. In economic news, on Tuesday the ISM Manufacturing data showed U.S. manufacturing contracted and at a 10 year low. Headline ISM came in at 47.8 with the employment component edging down 1.1% to 46.3. In today’s news, the ADP Employment data shows U.S. job gains are steady but not robust. ADP came in at 135,000 versus an expectation for 150,000. The September ADP figure was revised lower to 157,000, regardless the figure job creation is positive and labor markets remain tight.

EU Markets Slammed By Politics And Economics

The EU markets are down hard at midday on Wednesday after a round of weak data and less-than-positive news on the Brexit front. In economics, the U.S. manufacturing data is a sign that current trade policies and the uncertainty around them is hurting business. German GDP estimates were revised lower today, to 1.1% from 1.8%, and the same is likely in the U.S. as well. The caveat for traders is that, while GDP estimates are in decline they are still positive.

The German DAX is down about -1.35% at midday with the CAX a little lower with a loss near -1.75%. The UK FTSE is in the lead with a decline of -2.25% driven by mounting certainty there will be a hard-Brexit. PM Boris Johnson is expected to deliver his proposal for a clean Brexit today. The bad news is the EU is expected to reject it if presented in the form leaked to the press.

In stock news, shares of Grenke are up more than 6% after reporting its 9-month update. Shares of Carl Zeiss Meditec are up 4.4% after the company raised guidance.

Asia Moves Lower, Recession Fears Grip The Market

Most Asian markets shed a  minimum of -.05% in Wednesday trading. The Korean Kospi led the losses with a decline of -1.95% followed by the ASX -1.50%. Japan shed only -0.50%. China and Hong Kong are closed. The focus is on data from around the world. The latest from the U.S., that reveals slowing in the global economy. Hopes are pinned to trade talks that are expected to resume next week. No deal is expected but there may be a positive development, we’ll see.

Futures Edge Higher, Weak Data Weighs On EU, RBA Cuts Rates To Record Low

The U.S. Futures Are Edging Higher

The U.S. futures are inching higher on Tuesday as trade hopes prop up expectations for future growth. While no deal is expected, the U.S. and China are planning to hold trade talks next week. Both sides are believed to need and want a deal, the questions are how long it will take to reach one and what it will look like when it is.  Along with this, traders are waiting on a ruling from the WTO that will open the door for U.S. tariffs on EU goods. The WTO is expected to rule that EU subsidies to aircraft manufacturers are unfair and hurt U.S. businesses.

The Dow Jones Industrial Average is up 0.28% in early trading while the NASDAQ and S&P 500 are up 0.23% and 0.18% respectively. In economic news, traders are waiting on manufacturing PMI and construction spending due out later today. Later this week focus will be on the labor data including ADP on Wednesday and NFP on Friday. Also on tap, today are a number of Fed speeches including one from James Bullard.

EU Markets Falter On Weak PMI Data

The EU markets are edging lower in early Tuesday trading after a round of weak PMI data from the region. The CAC, DAX, and FTSE are all down about -0.12% at midday. Official EU manufacturing PMI shows the bloc’s activity continues to contract. The final read came in at 45.7, a tenth better than the flash reading but still a seven-year low. Germany led the contraction with a PMI reading of 41.7.

In political news, UK PM Boris Johnson continues to defend his plan for a new Brexit deal among growing criticism. Johnson is speaking before a conference of his ruling Conservative party this week. In stock news, plumbing giant Fergusson saw its shares surge more than 3.4% after it reported better than expected results.

Asia Moves Higher, China Closed For Holiday

Asia-Pacific stocks moved higher after the RBA cut its rate to a record low. The RBA cut interest rates by 25 bps to 0.75% and levels never before seen in the Land Down Under. According to remarks made by RBA officials after the release, we can expect rates to remain low for an extended period of time. There is also a chance for future cuts to even lower levels. The ASX led Tuesday’s gains with an advance of 0.81% while the Nikkei and Kospi both rose about 0.45%. Mainland Chinese and Hong Kong markets are closed today for the 70th anniversary of the foundation of the People’s Republic of China celebrations.

Futures Edge Higher, Global Markets Mixed, Trade Uncertainty Reaches New Highs

The U.S. Futures Are Edging Higher In Early Monday Trading

The U.S. futures market is indicating a higher open for the major indexes on Monday morning. The moves are small but show some optimism after a weekend of conflicting news. Reports the White House would move to block investment into Chinese companies was later countered by an official statement that no, the White House was not considering such a move. This morning, trade advisor Peter Navarro called the early reports “fake news”. The Dow Jones Industrial Average is up about 0.25% in early trading, the S&P 500 is a notch higher at 0.30% and the NASDAQ Composite is in the lead with a gain of 0.45%.

In stock news, Thor Industries missed revenue estimates but delivered a whopping beat on the bottom line. The company reports EPS of $1.67 beats by $0.27 due to strengths in the U.S. and EU RV markets. Egg producer Cal-Maine says egg revenue rose 1.7% in the fiscal first quarter but still fell shy of estimates. Despite the miss, the company reports better than expected EPS but shares are down -4.5% anyway. On the economic front, this week is the end of the month which means the monthly labor data is due out. This will include ADP, Challenger, and the Non-Farm Payrolls report.

EU Markets Are Flat And Mixed, Trade Is In Focus

The EU markets are flat and mixed after the latest round of trade talks. The CAC is in the lead with a gain of 0.18%, the FTSE lags with a loss of -0.14%, and the DAX is in the middle at 0.10%. The U.S. and China are still expected to hold meetings in China on October 10 but no deal is expected. The materials sector is in the lead with a gain of 1.1% while F&B has shed -0.5%.

In local news, UK PM Boris Johnson says he will not resign from his position even if he fails to secure a new deal. He says his ruling conservative party is the only one that can guide the UK through an October 31 hard-Brexit. UK GDP came in at -0.2%. The decline was as expected and came with a sigh of relief from traders.

Asian Markets Are Mixed, China Data Better Than Expected

The Asian markets are mixed if a bit more volatile than other global markets. News from China is good if still weak and has the Chinese-centric indices moving in opposite directions. The official Chinese PMI came in at 49.8 and 0.3 better than expected. A reading below 50 is contractionary so the news isn’t as good as it could be. On the other hand, the Caixin PMI of small-cap companies rose to 51.4 and 1.2 ahead of consensus. The Japanese Nikkei is down -0.56%, the Shanghai is down -0.29%, the Hang Seng is up about 0.55%, the ASX is down -0.41%, and the Kospi up 0.64%.

U.S. Core Consumer Inflation Rises, Hope Lifts Global Equities, China’s Industrial Profits Fall

The U.S. Equities Are Up In Early Trading

The U.S. equities are up in early Friday trading but only thing supporting the market is hope. The White House announced trade talks have been set for October 10-11 amid rising expectation a deal may come soon. President Trump’s remarks to reporters that a deal may come sooner than expected is good news but not something you can take to the bank. At this point, it is best to put no faith in trade-related hope until a deal has been announced by both sides. For now, markets must be satisfied with delayed tariffs and the possibility that escalation has ended.

In stock news, shares of Wells Fargo are up nearly 3.0% in premarket trading. The company announced BNY Mellon Chairman and CEO Charles Sharf will take over as permanent CEO on October 21. Shares of Micron are also on the move but in the opposite direction. The company’s 1st quarter guidance is weaker than expected and largely related to its business with Huawei.

In economic news, Personal Income and Spending Figures were a little on the weak side. Income rose by 0.4% which was as expected while spending increased only 0.1%. The 0.1% is a tenth less than expected and may be related to Amazon’s Prime Day holiday in July. On the inflation front, headline PCE prices held steady from last month and are up 1.4% from last year. At the core level, prices are up 0.1% and 1.8%. The 1.8% YOY read is up a tenth from the previous month and an indication FOMC rate cuts are doing their job.

European Markets Are Higher Amid Rising Uncertainty

The EU markets are higher amid rising uncertainty for a smooth Brexit. UK PM Boris Johnson is facing increased opposition and rising tempers in Parliament. The latest news comes from EU President Jean-Claude Juncker. Juncker says if no deal is reached and the UK hard-Brexit’s it will be the UK’s fault. The news did not stifle markets however, the FTSE gained about 1.0% where it is trading at midday. The DAX is up 0.80% and the CAC about 0.25%, basic resources are in the lead with an advance of 1.7%.

Asian Markets Closed The Week Mixed

Asian market finished the week on uncertain footing. The Nikkei, Hang Seng and Kospi all fell during the session with the Kospi leading. The Korean index fell -1.20%. The Shanghai Composite and Australian ASX posted to modest to moderate gains. In China, industrial profits fell -2.0% from the previous year. The news is unexpected and follows two months of mid-single-digit increases. In stock news, shares of Softbank were among today’s biggest losers falling -2.0%.

Markets Edge Higher, Trade Hope Lifts Sentiment, U.S. Consumer Inflation Runs Hot

The U.S Futures Are Moving Higher

The U.S. futures are moving higher in early Thursday trading but the gains are limited. The Dow Jones Industrials are in the lead with a gain near 0.25%. The S&P 500 and NASDAQ Composite are close behind with advances of 0.20% and 0.15%. The positive vibe is driven by yesterday’s comments from Donald Trump. Trump says a trade deal with China could come sooner than we think. In truth, the deal could come sooner than we think, traders are cautioned not to be too optimistic. The deal could come much later than we think.

Shares of global industrial giants Caterpillar and Boeing are both up slightly in early trading because of trade hopes. In other news, shares of Beyond Meat are up nearly 20% after McDonald’s announced a successful test of the product. Carnival Corporation is expected to report earnings this morning, Vail Resorts will report later today.

In economic news, the 3rd and final revision of U.S. 2nd quarter GDP came in unchanged as expected. What was not expected was an upward revision to core consumer prices, up 0.2% to 1.9%. Today’s labor data shows unemployment claims continue to run cool. Claims advanced 3,000 over the last week to hit 213,000.

European Markets Move Higher, Trade Hopes Rise

The European markets moved broadly higher on Thursday on improving trade hopes. The UK FTSE 100 is in the lead at midday with a gain of 1.12%. The French CAC is in second place with an advance of 0.80% while the DAX trails at 0.54%. In the UK, PM Boris Johnson is standing firm. Johnson has challenged the main opposition party leader to hold a vote-of-no-confidence, a move that would force a snap-election if passed.

In Germany, the sentiment was bolstered by some good news on the consumer. The German consumer sentiment rose for the first time this year showing some resilience within the domestic economy. In stock news, shares of Pearson fell -16% after issuing a profit warning. Shares of Imperial Brands are also down hard, -9.0% after it issued a profit warning.

Asian Markets Mixed, Shenzen Fall -2.0%

Markets in Asia are firmly mixed at the end of the day on Thursday. The big loser is mainland Chinese small-caps, the Shenzen fell -2.0%. The Shanghai Composite is also down hard, about -1.0%, while other losers in the region fell a more tepid -0.50%. Stocks in Japan rose about 0.15% on word Japan and the U.S. had an initial agreement on trade. Shares of Fanuc led the advance gaining about 2.5%. Autos also moved higher and gained an average of 1.5%.

Market Sentiment Sours, Impeachment Proceedings Cloud Trade Outlook, RBZ Holds Rates Steady

The U.S. Futures Are Flat And Mixed In Early Trading

The U.S. indices are indicated to open flat and mixed on Wednesday. The market sentiment is souring in the wake of yesterday’s landmark announcement. The U.S. Speaker of the House Nancy Pelosi launched formal impeachment proceedings against President Donald Trump calling his entire administration into question. The proceedings were precipitated by a whistleblower who claims Trump strong-armed the newly elected Ukranian President. The purpose was to dig up dirt on Joe Biden, the result is a hurdle Trump may find insurmountable. The question now is, what did Trump say? According to the White House transcripts of the call are going to be made public.

In stock news, Phillip Morris and Altria announced an end to merger talks. The talks broke up over JUUL which is now under intense scrutiny for its marketing and sales practices. Shares of both stocks are up sharply in premarket trading but Phillip Morris is in the lead. Shares of Best Buy are also moving higher in early trading. The big-box retailer came out with an aggressive upgrade to guidance but shares only advanced marginally on the news. In other news, KB Homes, Lennar, and Toll Brothers all received upgrades from Raymond James. The sell-side analyst is expecting strong results and indications of improvement within the housing market.

EU Markets Move Lower

The EU markets are moving lower in early trading. The CAC is in the lead at midday with a loss of -1.35% while the DAX and FTSE trail with declines of -1.00% and -0.55%. Trump, impeachment, and the impact on trade talks are the cause of today’s decline. With Trump’s ability to govern impeded by impeachment China is expected to stand firm on trade. With this in mind, it is more and more certain no deal will be reached before the next U.S. presidential elections.

In local news, there are new calls for UK PM Boris Johnson to resign. After Tuesday’s Supreme Court ruling his ability to govern is slipping away. Despite this, Johnson stands by his pledge to take the UK out of the EU on October 31 with or without a deal. In stock news, shares of EDF are down more than -6.0% in early trading. The utility says it misestimated costs for a new project and drastically increased those projections. Shares of UK’s Sainsbury are up 2.6% after it announced the closure of 100 underperforming stores.

Asian Markets Move Lower

Asian markets moved lower on Wednesday too. The threat of impeachment on trade talks has investors on edge. The Shanghai Composite, Hong Kong Hang Seng, and Korean Kospi all fell more than -1.00% on the news. Japan and Australia were also moving lower but declines were much less. In New Zealand, the RBZ held its key rates unchanged but says further cuts may come.

Markets Edge Higher, Trade Hopes Rise, Weak Data Drags On Sentiment

The U.S. Market Is Up In Early Tuesday Trading

The U.S. futures market is pointing to a slightly higher open on Tuesday. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all up about 0.30%. The move is fueled by trade optimism although weak data from the EU capped gains. In trade news, Treasury Secretary Steve Mnuchin says trade talks will resume in two weeks. Mnuchin and Trump say China is ready to buy more agricultural products and that is echoed by news from China. Chinese media sources report the country has issued waivers for 2 million tons of U.S. soybeans and 1.2 million are already purchased.

In stock news, shares of Apple, Caterpillar, and Boeing are up about 1.0% on the apparent thaw in trade relations. In other news, Carmax reported earnings before the open and beat on the top and bottom lines. The news has the shares on the move and up 2.5% in premarket trading. Autozone reported mixed results in that revenue grew 12% and beat expectations but EPS fell short. Shares of the stock held relatively flat on the news, strong comp store sales have analyst hopeful future revenue and EPS will continue to grow.

EU Markets Mixed, Johnson’s Parliament Suspension Is Unlawful

The EU markets are mixed and flat at midday on Tuesday. The trade news is supporting stocks but geopolitical woes and specifically Brexit unease have traders cautious. The DAX is flat and barely above breakeven, the CAC is up about 0.15% and the FTSE down -0.35%. In the UK, sentiment is souring on increasing Brexit unease. The UK Supreme Court ruled Boris Johnson’s suspension of Parliament was unlawful. The court says the leaders of the two houses must now decide what to do next. If Parliament resumes it is assured there will be renewed debate and additional delay to the Brexit.

In stock news, shares of Manchester United are moving lower. The publicly traded football organization grew revenue by nearly 10% but failed to produce a profit for investors. Shares are down more than -1.0% in early trading. In economic news, German business sentiment rose in the last month but remains low. The bad news is the outlook for future conditions fell to a new ten-year low.

Asia Mixed, Flat and Directionless

Asian markets are mixed, flat, and directionless at the end of trading on Tuesday. While trade hopes are on the rise the small improvements may be too little too late. Weak data from the EU on Monday only added to the malaise. The Kospi is up about 0.45% while the Shanghai Composite and Hang Seng are both up about 0.25%. The Nikkei is up about 0.10% and the ASX is down -0.01%.

Global Markets Fall, EU Manufacturing Recession Deepens, Trade Talks Productive But Yield No Results

The U.S. Markets Are Indicated Lower On Monday

The U.S. indices are indicated to open lower on Monday. Investor sentiment is souring due to lack of progress with trade negotiations and weak economic data from the EU. In trade news, both the U.S. and China said last week’s talks were productive and yet no progress was made. In addition, China’s planned trip to American farmland was called off furthering the appearance of discord among negotiators. At this time no deal is expected before the U.S. election. The Dow Jones is in the lead with a loss near -0.10% while the S&P 500 is down about -0.05% and the NASDAQ Composite is up 0.05%.

In economic news, the Chicago Fed’s National Activity Index shows conditions rebound in August. All four of the index’s sub-components improved from the last month although three of them are still negative. The headline reading is 0.10, up from -0.41 last month, and the three-month average improved to -0.05. The flash reading of Markit PMI is due out later today.

In stock news, shares of Facebook are under pressure as the Congressional probe into antitrust violations deepens. Congress members are now talking to CEOs and employees of Facebook’s partners about the company’s strong-arm tactics. In other news, Tesla faces a lawsuit over CEO Elon Musk’s pay package.

European Markets Fall Hard On German Data

The European markets are down across the board after weaker than expected German PMI data. Markit’s composite PMI fell below 50 and into contractionary territory as the manufacturing recession deepens. The manufacturing PMI fell to 41.4 and the lowest level in over ten years. The German DAX led today’s rout with a loss of -1.10% while the CAC fell -1.05% and FTSE fell a less severe -0.40%.

In stock news, Thomas Cook is the talk of the day. The ailing travel and leisure company says it can’t get emergency financing and must close its doors. The news comes as a shock to thousands of employees and travelers now stuck on vacation. The upshot is the company’s failure alleviates overcapacity in the industry and will boost results for others in the business.

Asia Mixed, Trade Talks In Focus

Asian markets were mixed although China showed some trade-related weakness. The Shanghai Composite and Hong Kong Hang Seng both shed nearly -1.0% while the ASX and Kospi both closed with small gains. Japan’s markets are closed today for a holiday. Shares of travel giant Fosun are the biggest mover in today’s market, down about -4.0%, because it is the largest shareholder in now-defunct Thomas Cook. In other news, oil prices are on the rise again due to news the Saudi’s will not be able to repair its oil facility as quickly as first thought. The new estimates are now “months” longer than first estimated.

How To Trade Bonds Using Macro Indicators

Bonds; What They Are And Why You Want To Own Them

Bonds, the bond market, bond yields, and the yield-curve are important aspects of the financial markets every trader should understand. It doesn’t matter if you are a bond trader or not, understanding the nature of the bond market can provide a deeper insight into just about every other market on the planet.

First let me answer the question, what is a bond? A bond is a pledge or a promise for one individual or entity to repay a debt that can be bought and sold by the public. It is, in essence, a way to guarantee a debt, the seller is borrowing money and the buyer is lending.  Bonds can be issued by just about any type of organization but are most commonly used by governments and businesses to raise large amounts of capital.

The bond issuer agrees to pay the bondholder an amount of interest that is predetermined at the time of the exchange in return for a loan.

Governments and businesses often need to borrow more money than what they can access through traditional banking means. In order to raise this money, they use public bond markets so they can tap into a larger liquidity pool. Investors buy the bonds in return for interest payments they receive over time or upon maturity. The amount of interest the issuer pays and the owner receives depends on a number of factors including Credit Rating, Interest Rates, and Demand.

Credit ratings for bonds are similar to the credit score you get as an individual, it is a measure of the bond issuer’s ability to repay the debt. Ratings are issued by agencies like Moody’s and Standard & Poors in a range from Investment Grade through Junk. Investment Grade bonds have the least likely of default, the least amount of risk, while Junk bonds have the highest amount of risk. A higher risk of default equates to a higher interest rate for the borrower, the issuer of the bond. That is good for the owners of bonds because it means a higher rate of return.

Safety-seeking investors may accept smaller returns for guaranteed investments and focus only on investment-grade bonds.

Demand can affect a bond’s cost/return ratio the same as any trading asset. Because bonds are typically issued in batches the amount of debt available for investors to buy is limited. If there is enough demand it can drive the cost of ownership higher and lower the effective yield. This is bad news for the bond investor but good news for the issuer because it lowers their cost of borrowing.

Central Bank Policy Underpins Bond Market Conditions

Interest rates are important for bonds because they determine the cost for issuers and return for investors. What makes bond trading hard is that interest rates change over time which means there times you may want to be a seller of bonds and other times when you want to be a buyer of bonds.

The primary force behind this is the prime rate or base rate maintained by the central bank of the country in which the bond is issued. When the prime rate is high bond rates tend to be higher and when the prime rate is lower bond rates tend to be lower. The challenge for bond traders is when the central bank is the process of altering its policy and changing the prime rate.

Central banks move their target for the prime rate up and down in an attempt to maintain economic stability within their respective nations. If economic activity is too high they raise the cost of borrowing money to make it harder for businesses to borrow. If activity is too low they lower the rate in an effort to stimulate business investment and flow within the capital markets. Savvy investors can sell bonds short when rates are low and then buy them back when they are high profiting on the cost of the bonds and receive interest payments in the meantime.

Inflation – This Is Why Central Banks Change Their Policy

The number one tool that central banks use to measure the economy and determine the trajectory of their policy, whether rates are rising or falling, is inflation. Inflation is a measure of price increases over time and can be applied to many aspects of the economy. The two most commonly tracked are business and consumer inflation. To that end, two of the most tracked inflation reports are the Producer Price Index and the Consumer Price Index.

Of the two, the Consumer Price Index or CPI is by far the most important. Consumers are the backbone of modern economies. While producer prices may bleed through to the consumer level, if consumer prices get too high there is nothing for an economy to do but collapse. In the U.S., the Personal Consumption Expenditures Price Index or PCE is the favored tool for measuring consumer-level inflation. It is released once per month and as a part of the quarterly GDP announcement.

Regarding inflation, most central bankers favor a 2.0% target for consumer-level inflation. This means that when CPI or PCE prices are below 2.0% the central banks tend to be “accommodative” toward their economies and ease back on policy by lowering interest rates. When CPI or PCE is above 2.0%, central banks tighten policy by raising interest rates.

Labor Data And Its Role In The Inflation Picture

Labor data plays an important role in the inflation picture. First and foremost, no economy can function if its people are not working. The FOMC at least is mandated with two functions and one of them is to ensure maximum employment. Figures like the non-farm payrolls, unemployment, and average hourly earnings become important in that light. The difficulty the FOMC faces is that stimulating labor markets can lead to increased wage inflation.

Economic Activity, Central Banks And Bond Trading

Economic activity is the alpha and omega of bond trading. When economic conditions are good capital markets are flush, when economic conditions turn the capital markets dry up and bonds are harder to issue. The takeaway is that economic conditions are what the central banks are trying to manipulate and they do that through interest rates. When conditions are bad, interest rates will fall, when conditions improve interest rates will rise until they reach a point the economy recedes. That is the nature of the bond market and bond trading, understanding that ebb and flow is key to bond trading success.

According to Learn Bonds, when the economy is performing badly and the stock markets are highly volatile, investors tend to switch investments to fixed income securities and this boosts the activity in the bond market. But this is not always the case. High volatility can sometimes drive investors towards short-term trading via online trading platforms. This way, they can benefit from both sides of the market without having to hold stocks for long periods.

Yield Curve And Market Outlook

There is a limitless supply of bonds but not all are the same. When it comes to bonds the safest, most trusted, and closely watched are U.S. Government Treasuries. The U.S. Treasuries are issued in a variety of maturities that range from a few weeks to thirty years. The yields on each maturity are different due to demand for time-frame, either long or short-term investment and can be analyzed for insight into market sentiment.

Known as the yield curve, in good time the spread of yield increases the further out you go. This is because investors believe that interest rates will be higher in the future so they don’t want to lock-in a low yield for too long. This phenomenon results in a higher demand for shorter-maturity bonds and a “normal” yield curve. In bad times that all changes. Bond investors believe interest rates will be lower in the future so they are seeking to lock in the higher rate for a longer duration. That creates a higher demand for longer maturity bonds and a signal known as a yield-curve inversion

This graph shows a partially inverted U.S. yield curve.

Global Markets Are Cautious, Trade Talks Yield Mixed Results, No Deal Expected Soon

The U.S. Futures Are Up Slightly In Early Friday Trading

The U.S. futures are indicating a slightly higher open in early Friday trading after a week of big news. The Fed’s decision, trade talks, and economic data have all wreaked havoc on market sentiment. The FOMC lowered rates, as expected, but remained hawkish on the economy. The news should be taken as a double-dose of good news because it means lower rates and a strong economy yet the market did not cheer the announcement.

On the trade front, yesterday’s deputy level meeting was not expected to yield many results and yet has caused a stir in the market. Negotiators are said to have had positive interaction and Trump postponed some tariffs yet the outlook for a deal has soured. A close Trump advisor and China hawk says the President stands ready to raise tariffs if a deal isn’t reached soon while China says it isn’t as ready to deal as the U.S. would like to think. Bottom line is trade-relations will remain a point of uncertainty for the foreseeable future.

In stock news, shares of Apple are moving higher in early action as consumers wait in line for the release of the latest iPhone.  In other news, we are expecting a handful of speeches from FOMC members that may cause some volatility.

EU Markets Are Mixed, Trade Hopes And Brexit Woe

EU markets are mixed at midday on Friday. The French CAC is in the lead with a gain near 0.30% while the FTSE trails at 0.15% and the DAX is hugging break-even. Trade hopes are helping to support stocks although Brexit unease drags on sentiment. In Brexit news, markets are waiting on a ruling from the UK Supreme Court on whether Boris Johnson’s suspension of Parliament was legal or not. The ruling will come next week.

In stock news, shares of Alten are at the top of the rankings. The company reported solid first-half results and sparked an upgrade from SocGen. Shares of the stock are up nearly 10%. At the other end of the spectrum, shares of Signify are down about -7.0%. Phillips revealed it would sell the remainder of its stake.

Asia Mostly Higher, China Cuts Rates

Asian markets are mostly higher at the end of the day on Friday. The Korean Kospi is in the lead with a gain of 0.55%. Most others are up closer to 0.15% to 0.20%. The Hong Kong Hang Seng is the only index in the red and it is down -0.13%. In China, the PBOC cut the LPR rate allowing easier access to capital for the country’s most-trusted borrowers. In Japan, core consumer inflation came in at 0.5%, below expectations and at a 2-year low. This news helps ensure the BOJ will cut rates next month.