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%.

Asian Shares Rise as Upbeat Brexit News Offsets IMF’s Prediction of Lower Global Growth

The major Asia Pacific stock indexes are trading mostly higher on Wednesday, boosted by upbeat news regarding Brexit from the previous day. Brexit hopes were boosted by news that the European Union and United Kingdom were close to a deal. However, gains may have been limited by a warning from the International Monetary Fund (IMF) on Tuesday that the U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis.

At 07:09 GMT, Japan’s Nikkei 225 Index is trading 22472.92, up 265.71 or +1.20%. Hong Kong’s Hang Seng Index is at 26644.67, up 140.74 or +0.53% and South Korea’s KOSPI Index is trading 2082.83, up 14.66 or +0.71%.

In Australia, the S&P/ASX 200 Index is trading 6736.50, up 84.50 or +1.27% and in China, the Shanghai Index is at 2976.77, down 14.28 or -0.48%.

Brexit Traders Eye Imminent Draft Deal

Asian shares were supported on Wednesday after optimistic comments on Brexit from European negotiator Michel Barnier were backed up by reports that a draft legal text over the divorce was being drawn up.

“Our team(s) are working hard, and work has just started now today, this work has been intense over the weekend and yesterday, because even if the agreement will be difficult, more and more difficult, to be frank, it is still possible this week,” Barnier told reporters in Luxembourg on Tuesday morning.

He added that “any agreement must work for everyone,” saying it is “high time to turn good intentions into a legal text.”

By mid-afternoon (Tuesday), one report suggested that a draft deal was in the works according to two separate sources familiar with negotiations.

IMF Says Trade War Will Cut Global Growth

The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund (IMF) warned on Tuesday, adding that the outlook could darken considerably if trade tensions remain unsolved.

The IMF said its latest World Economic Outlook projections show 2019 GDP growth at 3.0%, down from 3.2% in a July forecast, largely due to increasing fallout from global trade friction.

The World Economic Outlook report spells out in sharp detail the economic difficulties caused by the U.S.-China tariffs, including direct costs, market turmoil, reduced investment and lower productivity due to supply chain disruptions.

Other News

South Korea’s central bank cut its interest rate for the second time in three months on Wednesday, as expected, following its first cut in July.

In Australia, the listing of lender Latitude Financial, what was to be the biggest Australian IPO of the year, has been canceled, according to Reuters. The IPO was canceled because a large proportion of demand for shares was coming from hedge funds rather than desired long-term investors.

In New Zealand, the Reserve Bank signaled more rate cuts, or even unconventional stimulus measures, may be needed to counter global headwinds, as figures on Wednesday showed the country’s annual inflation rate slowed in the third quarter.

Inflation fell to 1.5% in the year to end-September from 1.7% previously, Statistics New Zealand said, moving further away from the central bank’s target, but slightly ahead of a 1.4% rise predicted in a Reuters poll of economists.

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. Stocks Turn Lower as Investors Sour on ‘Phase One’ Trade Deal

The major U.S. stock index futures turned lower for the pre-market session Monday morning and hedgers returned to the Treasury bonds, gold and Japanese Yen after China said it needed to have further discussions before it would sign off on the so-called phase one trade deal President Donald Trump announced on Friday.

The early market price action has the S&P 500 Index opening about 0.42% lower, the Dow off by 95 points or 0.35% and the NASDAQ Composite trading about 0.54% lower.

China Wants More Talks Before Signing ‘Phase One’ Deal

According to a Bloomberg report, China trade officials wanted more talks by the end of October to discuss details of the “phase one” trade deal.

This now has investors wondering if the additional tariffs originally scheduled to start on October 15, and suspended as of Friday, are back on. We’ll probably hear more about this from the Trump administration later in the session.

On Friday, President Trump announced that the first phase of a deal with China had been agreed, though officials on both sides said much more work needed to be done.

However, the deal that does not include many details and Trump has warned it could take up to five weeks to get a pact written. Furthermore, analysts are saying it appears to be more of a “temporary” than a real trade pact.

Investors took no chances upon hearing the news. Besides driving stocks lower and erasing some of Friday’s gains, hedgers drove December Treasury Notes 0.46% higher. December Comex gold futures rose 0.73% and the Japanese Yen jumped 0.24% higher. These protection moves are likely to increase if investors continue to turn sour on the deal.

Asian Markets Up, Europe Down

Shares in Asia rose in reaction to Friday’s partial trade deal news. Investors had no reaction to the Bloomberg report, which came out after the Asian markets had closed.

The major bourses in Europe turned lower after the report was released. According to CNBC, the pan-European Stoxx 600 slipped 1.1% during the morning trade, with basic resource stocks losing 2.6% to lead losses as all sectors traded in negative territory.

The Bloomberg report was not a complete surprise as Citi analysts pointed out in an earlier report.

“Despite what appears to have been achieved in the October talks, we remain cautious on an eventual trade deal,” the analysts wrote in a note. “The US offers are far from what China has been demanding, as showcased in its June State Council White Paper:  reasonable purchases of US imports, removal of existing tariffs, and giving the trade document a balanced treatment.”

In other news, customs data showed that China’s import and export figures were worse than expected in September, with exports falling 3.2% on the year in U.S. dollar terms, while imports declined 8.5%, according to Reuters.

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.

Asian Shares Boosted by Trade Talk Optimism

The major Asia Pacific stock indexes closed higher on Friday as investors remained optimistic that U.S.-China trade negotiations would end with a positive outcome. The strength was attributed to a tweet by U.S. President Donald Trump that said he is set to meet with Chinese Vice Premier Liu He on Friday.

On Friday, in Japan, the Nikkei 225 Index settled at 21798.87, up 246.89 or +1.15. In Hong Kong, the Hang Seng Index finished at 26308.44, up 600.51 or +2.34% and in South Korea, the KOSPI Index closed at 2044.61, up 16.46 or +0.81%.

Australia’s S&P/ASX 200 settled at 6606.80, up 59.70 or +0.91% and China’s Shanghai Index finished at 2973.66, up 25.95 or +0.88%.

Investors Betting on Positive Trade Developments

Shortly after the U.S. cash market opening on Thursday, President Donald Trump said he’s meeting with Chinese Vice Premier Liu He on Friday, fueling optimism about a positive outcome from this week’s high-level trade talks.

“Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House,” Trump said in a tweet Thursday.

Trump’s comment about a meeting with Liu contrasted with a report from the South China Morning Post that said the two sides made no progress in deputy-level trade talks this week and Liu will cut his visit short.

You know the drill, investors bought stocks on the news, driving the indexes sharply higher in the U.S., in a move that carried over to the Asian session.

China Carries “Great Sincerity”

Before the markets opened on Thursday, Liu told Chinese state-run media agency Xinhua that China carries “great sincerity” to the talks this week.

“The Chinese side has come with great sincerity and is willing to make serious exchanges with the U.S. on issues of common concern such as trade balance, market access and investor protection, and promote positive progress in the consultations,” Liu said.

Possible Outcomes

“To affirm a temporary trade truce, the second day of trade talks (Friday) will need U.S. President Trump to suspend or cancel the U.S. tariffs that are scheduled to hit on Chinese goods October 15 and December 15,” strategists at Singapore’s DBS Group Research wrote in a note.

Still, in the longer term, the strategists said: “The broader China-US trade war remains unresolved,”

Analysts at J.P. Morgan said in a note they expect four possible scenarios could emerge from the trade negotiations.

First, an “ice-breaking meeting that will lead to a major deal” in the coming months, second, a “mini-deal” focusing on China’s purchase of U.S. products and some structural reforms while new tariffs get postponed indefinitely, third, a no-deal status quo where new tariffs come into play, but negotiations continue, and finally, a break-up scenario, where there’s no deal and no further dialogue between the U.S. and China.

J.P. Morgan analysts said they are expecting a no-deal status quo while “market investors also have high hopes for a mini-deal.”

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.

Asian Shares Finish Higher after Wild Ride

The major Asia Pacific stock indexes went for a wild ride on Thursday before turning higher for the session as investors reacted to two major developments ahead of the start of high level talks between the United States and China.

Early in the session, shares were sent sharply lower after the South China Morning Post reported that high level trade negotiations including Chinese Vice Premier Liu He would be cut to one day. Later, Bloomberg News reported that the U.S. was considering an agreement to suspend next week’s tariff increase in exchange for a currency pact.

At 08:17 GMT, Japan’s Nikkei 225 Index was trading 21551.98, up 95.60 or +0.45%, South Korea’s KOSPI Index was at 2028.15, down 18.10 or -0.88% and Hong Kong’s Hang Seng Index was trading 25700.84, up 18.03 or +0.07%.

In China, the Shanghai Index was trading 2947.71, up 22.85 or +0.78, and in Australia, the S&P/ASX 200 Index finished at 6547.10, up 0.40 or +0.01%.

US and China Make No Progress

Early in the session on Thursday, the major indexes plunged after the South China Morning Post reported that deputy-level trade talks between the United States and China aimed at laying the groundwork for high-level negotiations later this week failed to yield any progress on critical issues, according to two sources with knowledge of the meetings.

During the discussions on Monday and Tuesday in Washington, the Chinese refused to talk about forced technology transfers, and also skirted the issue of state subsidies. Furthermore, Chinese negotiators spent the time focusing on only two areas:  agricultural purchases and intellectual property protection.

“They have made no progress,” said another source familiar with the talks, adding that the Chinese side had not made headway in persuading US negotiators to consider a freeze on tariff increases, a main priority for Beijing.

High-Level Talks May Only Last One Day

The SCMP also reported that the Chinese delegation is planning to leave Washington on Thursday after just one day of principal-level talks, said another source. Beijing’s negotiating team, headed by Vice-Premier Liu He, had previously planned to leave Washington late on Friday, allowing for up to full days of talks.

Markets Rebound on Huawei Concessions Report

After the sharp break early in the session, Asian shares mounted a powerful comeback rally to turn higher for the day after the New York Times reported Wednesday evening stateside that U.S. President Donald Trump’s administration is set to grant licenses that would allow American firms to sell nonsensitive supplies to Huawei.

Earlier this year, the White House banned sales to the Chinese telecommunications giant, citing national security concerns. The ban was subsequently delayed by the administration to allow American firms to make other arrangements.

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%.

Asian Shares Capped Amid Growing Uncertainty Over Trade Talks

Asia Pacific shares were mostly lower on Wednesday as investors continued to express their uncertainty over the outcome of the high-level trade talks between the United States and China that were set to begin in Washington on October 10.

At stake, should the talks result in nothing substantive, is an escalation of the trade war between the two economic powerhouses with the White House standing ready to hit China with new tariffs on $250 billion worth of Chinese goods to 30% from 25% on October 15.

At 07:59 GMT, Japan’s Nikkei 225 Index is trading 21456.38, down 131.40 or -0.61%. Hong Kong’s Hang Seng Index is trading 25740.62, down 152.78 or -0.59%.

In China, the Shanghai Index is at 2924.86, up 11.29 or +0.39% and Australia’s S&P/ASX 200 Index is trading 6546.70, down 46.70 or -0.71%.

The markets are closed in South Korea.

Stocks lost ground in Asia, but the selling pressure did not match the rout in the United States, where all three major indexes on Wall Street lost over 1%.

US-China Trade Deal Worries at Forefront

Helping to raise the level of uncertainty over even a “mini-deal” between the United States and China was Washington’s expansion of its trade blacklist to include some of China’s top artificial intelligence firms. The move prompted China’s Ministry of Commerce to say the U.S. should “stop interfering” in the country’s internal affairs and “remove” the relevant entities from the list “as soon as possible.”

Furthermore, a Ministry of Commerce spokesperson said, “China will also take all necessary measures to resolutely safeguard China’s own interest.” U.S. investors read this statement to mean China will retaliate for the new black listings. Chinese Foreign Ministry spokesman Geng Shuang said to “stay tuned” for China to fight back.

U.S. Escalates Tensions with Visa Restrictions

The Trump administration on Tuesday put visa restrictions on Chinese officials “who are believed to be responsible for, or complicit in, the detention and abuse” of Muslim minority groups in Xinjiang.

“The United States calls on the People’s Republic of China to immediately end its campaign of repression in Xinjiang, release all those arbitrarily detained, and cease efforts to coerce members of Chinese Muslim minority groups residing abroad to return to China to face an uncertain fate,” Secretary of State Mike Pompeo said Tuesday in a statement.

Low Expectation for Deal

Also keeping a lid on the markets was tempered optimism over a trade deal with Hu Xijin, editor-in-chief of the Global Times saying that China now has “low expectation for real breakthrough.”

Hu Xijin tweeted, “I can feel that Chinese society has low expectation for real breakthrough in the new round of trade talks. Most people think alternate trade war/trade talks will be a normal thing between China & the U.S. Plus, people widely think the Trump administration can’t honor its commitments.

“Mini-Deal” in Jeopardy

Two days ago, markets in the United States and Asia rose on “high hopes for a mini-deal” between the two economic powerhouses. This is one of four outcomes analysts at J.P. Morgan revealed in a note.

Now, just one day before the start of trade talks, reports from China are saying the Chinese delegation may cut short its planned stay in Washington and depart on Friday, dimming hopes for a trade deal.

If China were to walk away from the negotiation table earlier than expected, President Trump would probably impose immediately, the new tariffs on $250 billion worth of Chinese goods to 30% from 25% on October 15. Global equity markets would likely plunge on the news. Furthermore, China would likely retaliate, and the trade war will escalate.

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.

Asian Shares Boosted by Hopes of US-China ‘Mini-Deal’

The major Asia Pacific stock indexes are trading higher on Tuesday as investors welcomed China back into the mix after a week-long absence. Investors for the most part are downplaying reports that Chinese officials are growing hesitant to pursue a broad deal with the United States. While most are expecting a “no-deal”, J.P. Morgan analysts said “market investors also have high hopes for a mini-deal.”

At 06:58 GMT, Japan’s Nikkei 225 Index is at 21587.78, up 212.53 or +0.99%. Hong Kong’s Hang Seng Index is at 25992.55, up 171.62 or 0.66% and South Korea’s KOSPI Index is trading 2046.25, up 24.52 or +1.21%.

In China, the Shanghai Index is at 2915.53, up 10.34 or +0.36%. Australia’s S&P/ASX 200 Index settled at 6593.40, up 29.80 or +0.45%.

Samsung Electronics Announces Third-Quarter Guidance

Samsung Electronics said on Tuesday its operating profit for the three months that ended in September likely dropped by more than half from a year ago.

If the guidance is realized when the company reveals full results later this month, it will be the third consecutive quarter where Samsung’s operating profit has more than halved from the same period earlier. In the three months that ended June, Samsung said its operating profit fell 55.61% on-year.

Samsung has struggled in an environment where the price and demand for memory chips have been low for almost a year due to inventory adjustments and a supply glut.

Industry analyst are saying the industry-wide situation appears to be improving and there are signs of a broad-based recovery. Sanjeev Rana, a senior analyst at CLSA said, “We think 2020 will actually be a good year for Samsung’s earnings,” Rana said.

US-China Trade Talks Outlook

With trade talks between the two economic powerhouses set to begin on October 10, traders continue to focus on a number of scenarios that could arise from the meeting.

Analysts at J.P. Morgan said in a note they expect four possible scenarios could emerge from the trade negotiations.

First, an “ice-breaking meeting that will lead to a major deal” in the coming months; second, a “mini-deal” focusing on China’s purchase of U.S. products and some structural reforms while new tariffs get postponed indefinitely; third, a no-deal status quo where new tariffs come into play, but negotiations continue; and finally, a break-up scenario, where there’s no deal and no further dialogue between the U.S. and China.

J.P. Morgan analysts said they are expecting a no-deal status quo while “market investors also have high hopes for a mini-deal.”

Other Distractions for Investors

There is very little economic news this week which means investors have a lot of time to dwell on other areas. Of course, U.S.-China trade talks are at the forefront, but investors are also monitoring the ongoing Brexit discussions and debating the degree of easing required from the Federal Reserve following the recent string of weakening U.S. activity indicators and the slowing in the labor market.

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.

Asia Shares Mixed as Muted Reaction to Jobs Report Gives Way to Renewed Trade Talks

The major Asia Pacific stock indexes finished mixed on Monday as investors shifted their focus away from the U.S. economy and on to the renewed U.S.-China trade negotiations that begin later this week after talks collapsed five months ago. Ahead of the talks gains were capped after Bloomberg reported that Chinese officials are growing hesitant to pursue a broad deal with the United States.

On Monday, Japan’s Nikkei 225 Index settled at 21375.25, down 34.95 or -0.16%. South Korea’s KOSPI Index closed at 2121.73, up 1.04 or -0.05% and Australia’s S&P/ASX 200 finished at 6563.60, up 46.50 or 0.71%.

The markets were closed in China and Hong Kong. In Australia, parts of the country were closed for the Labor Day holiday.

Traders Digest US Non-Farm Payrolls

Traders had a muted reaction to the U.S. Non-Farm Payrolls report that was released on Friday after the Asian market close.

The report was called “solid” because it showed that underlying economic momentum in the U.S. remains strong.

Non-Farm Payrolls rose by 136,000, missing the 145,000 forecast. This disappointment, however, was offset by the news that unemployment hit a fresh 50-year low in September.

The good news is the jobs report helped erase some of the bearishness surrounding the U.S. economy after weaker-than-expected manufacturing and non-manufacturing PMI last week helped fan the flames of recession. Instead, investors now see the U.S. economy as weakening rather than rapidly deteriorating.

Furthermore, the labor news helped dampen the chances of a rate cut by the Federal Reserve later in the month. The markets are still pricing in at least two rate cuts before the end of the year, however, Fed Chairman Jerome Powell wasn’t as certain. Powell described the U.S. economy on Friday as being solid, noting the central bank must do what it can to keep it there.

China May Push for Short-Term Trade Agreement

A little more than two weeks ago, President Trump said he didn’t want a “partial deal” with Beijing, moving away from his suggestion in early September that he would consider an “interim deal.”

“We’re looking for a complete deal. I’m not looking for a partial deal,” Trump said.

Trump is looking for a deal that addresses intellectual property theft, forced transfer of technology and the U.S. trade deficit.

However, Bloomberg News reported over the weekend that Chinese officials are growing hesitant to pursue a broad trade deal with the U.S, according to people familiar with the matter.

Vice Premier Liu He, who will lead negotiations for China, told dignitaries that his offer to the U.S. will not include commitments on reforming Chinese industrial policy or government subsidies, according to Bloomberg. These are among the Trump administration’s main demands in the trade talks.

All this story does is highlight how difficult reaching a trade deal will be.

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%.

Asian Shares Flatten as Uncertainty Looms Large Ahead of US Payrolls Report

The major Asia Pacific stock indexes are trading mixed on Friday on relatively low volume ahead of Friday’s U.S. payrolls data for September. With investors rattled throughout the week because of a series of weaker-than-expected U.S. economic reports, today’s jobs report is expected to take on added importance.

The report could fan the flames of recession and further encourage the Fed to cut rates at the end of October, or it could show a dented, but relatively strong jobs market. Both outcomes are expected to trigger a volatile reaction in the financial markets.

At 04:10 GMT, Japan’s Nikkei 225 Index is trading 21344.74, up 3.00 or +0.01%. South Korea’s KOSPI is at 2029.95, down 1.96 or -0.10% and Hong Kong’s Hang Seng Index is at 25966.64, down 143.67 or -0.55%.

Australia’s S&P/ASX 200 Index is 6515.90, up 22.90 or +0.35%. The markets are closed in China.

Little Reaction to Wall Street’s Rebound Rally

The markets in Asia are showing little reaction to the dramatic recovery on Wall Street on Thursday. U.S. stocks sold off early in the session in reaction to a weaker-than-expected ISM Non-Manufacturing PMI report. This was the third piece of bad news this week. The first was a dismal ISM Manufacturing PMI report that extended its contraction for a second straight month in September. The second was the ADP private sector jobs report that showed down in hiring.

At the end of the session, expectations for an October rate cut jumped to 93.5% from 77% on Wednesday, according to the CME Group’s Fed Watch tool. Last Friday, this tool indicated a 20% chance of a 25-basis point rate cut at the Federal Reserve’s monetary policy meeting on October 29-30.

US Non-Farm Payrolls Estimates

At 12:30 GMT, the U.S. government will release the September U.S. Non-Farm Payrolls report. Non-Farm Employment Change is expected to show the economy added 145K jobs last month. This is up slightly from the previously reported 130K.

Average Hourly Earnings are expected to have risen 0.3% and the unemployment rate is expected to remain at 3.7%.

A weaker than expected headline number should drive the probability of a Fed rate cut to 100%. Treasury yields are likely to plunge and demand for safe-haven gold and Japanese Yen should jump.

Stocks will be volatile with some investors believing they’re a buy because of lower rates. Others will sell because they feel the rate cuts aren’t working to revitalize the economy and that the Fed may need to be more aggressive. Furthermore, the data will fan the flames of a global recession that should be bearish for Asia Pacific stocks.

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.

Asian Shares Plunge as US Slaps Tariffs on EU Goods; Hang Seng Bucks Trend on Hong Kong Mask Ban

The major Asia Pacific stock index plunged on Thursday, following Wall Street’s lead on Wednesday. The weakness was led by more than 2% declines in Japan and Australia. Renewed concerns over tariffs were the catalysts behind the selling pressure after the U.S. announced it was poised to slap additional tariffs on European Union goods.

On Thursday, Japan’s Nikkei 225 Index settled at 21341.74, down 436.87 or -2.01%. Hong Kong’s Hang Seng Index bucked the trend with a close at 26110.31, up 57.62 or +0.26%. Australia’s S&P/ASX 200 Index settled at 6493.00, down 146.90 or -2.21%.

The markets in South Korea and China were closed.

Hong Kong Markets Rebound

Shares in Hong Kong bucked the trend in Asia on Thursday, recovering from a steep sell-off to close higher for the session.

Earlier in the session, shares fell in reaction to yesterday’s bearish retail sales report for August, and the news of the new U.S. tariffs on Europe.

Stocks turned around late today to finish higher amid local media reports that authorities in the city are set to ban face masks at rallies through and emergency law.

The Hang Seng Index jumped to a one week high on Thursday after the news broke. For much of the day, the benchmark index was down along with other Asian markets until local broadcasters TVB and Cable TV said the Hong Kong government was set to ban face masks at public rallies in a bid to ease months of unrest.

Early Selling Fueled by Worries over U.S. Economy

Sellers came in early in Asia with traders using the plunge in the major U.S. indexes on Wednesday as their guidelines, amid worries over the prospect of an economic slowdown in the U.S. The selling pressure actually began on Tuesday after a report showed U.S. manufacturing activity contracted to its worst level in more than a decade, according to a report from the Institute for Supply Management (ISM).

The pressure accelerated on Wednesday after a September private payrolls report also showed a slowdown in the pace of U.S. hiring. This raised concerns that Friday’s U.S. Non-Farm Payrolls report will show a similar slowdown.

Traders are now pricing in another 25-basis point rate cut by the Federal Reserve at the end of the month. However, there is a growing number of analysts who are starting to believe that the rate cuts aren’t working to revitalize the economy and that the Fed is going to have to take a more aggressive approach in its effort to prevent the global economic weakness from hitting the U.S.

WTO Gives Trump Administration Right to Put Tariffs on Europe

The breaking story on Thursday is that the World Trade Organization (WTO) gave the Trump administration the right to put tariffs on $7.5 billion in European goods.

Stocks are being pressured because the action escalates conflicts the Trump administration has waged around the globe as it tries to get major trade partners to change their practices.

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.