Wall street

Asian Markets Drift Higher, ECB Dominates Trade In Europe, US Markets Brace For “Peak Earnings”

Uncertainty Caps Gains In Asia

Asian equities indices drifted higher in Thursday trading. Uncertainty dominates the market as trader await the outcome of an expected trade meeting scheduled for next week. The meeting, between Chinese Vice Premier Liu He and Washington’s top trade team, is an important step in the negotiating process between China and the US and there is a lot riding on the outcome. Until then it is watch-and-wait to see what happens.

The Korean Kospi led today’s action with a gain of 0.81%. The tech sector was strongest, shares of chipmaker SK Hynix were up more than 5.5% on earnings and despite missing analysts expectations. The company says sales were strong but revenue and earnings were impacted by lower prices.

Australian equities got a boost from positive data. Employment figures from the country were better than expected and show labor markets are robust. The data spurred one economist to say labor was “quite strong”, news that bodes well for general economic activity within the nation. Shanghai and Hong Kong were both up about 0.40% for the session, the Japanese Nikkei was the only stock to fall but it only posted a loss of -0.09%.

European Markets Wary Of The ECB

European indices were mostly higher at midday following a mostly as-expected policy statement from the ECB. The ECB has decided to hold its rates unchanged, no surprise there, but there was a small change in the statement. The Governing Council still expects to begin increasing rates late in 2019 but they may remain at current levels “longer, if necessary”.

The French CAC was leading at midday with gains near 0.80%. Tech and autos led, autos boosted by news Renault had selected a new chairman and CEO. The news had that stock up more than 1.25%.

In Italy, shares of ST Microelectronics surged 9.0% on its earnings and guidance. The company says the first half of 2019 is looking good, news that helped lift semiconductor stocks around the world. The German DAX was trading near 0/40% higher on the day, the UK FTSE 100 was showing a small loss as Brexit fears continue to stew. If things continue as they are a hard-Brexit is all but assured.

Peak Earnings Is At Hand

US markets were marginally higher in the early pre-opening session. The tech sector led but gains were broad, if small. The NASDAQ was up a mere 0.50% in the early hours despite strong showings from chipmakers in Asia and Europe. The trade was hampered by trade fears as well as expectations for earnings after the closing bell. After the closing bell reports include chipmaker Intel, consumer giant Starbucks, and rail-carrier Norfolk Southern.

The Dow Jones Industrial Average and S&P 500 were both positive in early trading but gains were small, less than 0.20%. A word from Commerce Secretary Wilbur Ross may have capped gains. Ross says the US is “miles and miles” from reaching a trade deal with China, news that most already assumed to be true.

Today’s data includes labor data from the US. Initial Claims fell more than expected and dropped below 200,000 for the first time in half a century. There are major earnings reports expected on Friday as well but the peak season is not until next week.