S&P 500 At New All Time High, Global Markets Mixed, Peak Earnings At Hand

The U.S. Futures Are Flat After Hitting All-Time Highs

The U.S. futures indicated a flat to a slightly higher open on Wednesday morning. Traders are cautious after the indices hit new all-time highs on Tuesday and so many earnings reports at hand. The Dow Jones Industrial Average was in the lead with gains near 0.20%. There was no economic data today.

Today’s early action was impacted by reports from Caterpillar and Boeing, both of which were better than expected. Caterpillar beat on the top and bottom lines and provided upbeat guidance. Boeing says the 737 Max problems are going to hurt the bottom line but not as much as analysts were predicting. If these trends continue the market may be able to produce a net positive earnings growth figure but it is still early in the season.

Afterhours action will be impacted by a number of reports from key S&P 500 names. These include but are not limited to Facebook, Microsoft, PayPal, Tesla, and Visa. PayPal and Visa should both easily surpass expectations. As payment processors, they are uniquely poised to benefit from labor and consumer trends. Microsoft is also expected to surpass consensus estimates. The company has been shifting to a cloud-based business model and so far the results have been good. Tesla and Facebook are a different story. Both of these tech giants are in the midst of scandal and controversy that will affect their performance.

Global Markets Remain Cautious With Earnings In Focus

Global equity markets remain cautious in Wednesday trading despite the U.S. new highs. In the EU the DAX was the only major market to advance, posting a gain of 0.65%, while both the CAC and FTSE declined. The FTSE led with a loss of -0.50%, the CAC followed at -0.25% during midday trading.

Autos were among the weakest performers. Shares of top auto stocks all fell about -1.0% after Nissan issued a guidance warning. The company cut its full-year profit forecast to down -45% and a near ten-year low. In other news, shares of Credit Suisse advanced 2% after it beat revenue and earnings consensus estimates. Shares of Wirecard led the market though, gaining 8% after Softbank announced it had acquired an 8% stake in the company.

Australia Advances 1%, Hit’s Ten-Year High

Asian markets were mixed but led by Australia. The Australian ASX gained 1% to hit a new 10-year high on rising oil prices and RBA outlook. The Australian economy is sensitive to commodity prices so oil trading at a five-month high and rising is a good thing. Regarding the RBA, labor and inflation trends suggest the central bank will be forced to cut rates to stimulate activity.

The Shanghai Composite was the only other major index to post a gain on Wednesday and that only 0.09%. The Korean Kospi led declining indices with a loss of -0.88%. The Hong Kong Hang Seng fell -0.53% and the Japanese Nikkei shed -0.27%.

Earnings Lift U.S. Futures, Trade Tensions Flare Up, Oil Prices Continue To Climb

Better Than Expected Earnings Lift U.S. Futures

The peak of earnings season happens this week and so far the reports are better than expected. The morning’s reports, from names like Coke, Twitter, and United Technologies, were all better than forecast and helped support the U.S. equities market. The Dow Jones Industrials were in the lead with an indicated open near 0.5% higher but others major indices were not so strong. The broad-market S&P 500 and tech-heavy NASDAQ Composite were both closer to break-even. Later today, after the close of trading, reports from Texas Instruments, eBay, and Stryker are on tap.

In trade news, a huge drop in profits from Harley Davidson highlighted the impact of EU tariffs on U.S. industry. Harley Davidson reports a near -27% decline in YOY profits due in part to EU taxes on imports of motorcycles. President Trump has vowed to reciprocate with tariffs on EU goods because the taxes on Harley Davidson are unfair. Harley Davidson also notes that higher input costs, due to U.S. levies on raw materials, is hurting profits too.

In economic news, traders will are waiting for the New Homes Sales and Richmond Federal Reserve manufacturing survey. Both reports are due out at 10 AM and may impact market sentiment.

EU Markets Brace For Earnings

EU markets were mixed in early Tuesday trading as traders brace for a round of key earnings. This week the EU’s biggest banks report and what they say could rock the market. The DAX led declining indices with a loss of -0.25% and was followed by the French CAC’s loss of -0.14%. The UK FTSE 100 was the only major market to be in the green at midday, it was up about 0.45%.

In earnings news shares of Umicore fell more than -15% after the company downgraded its fiscal 2020 revenue and earnings forecast. Countering this, shares of Thomas Cook surged more than 17% after word of a possible takeover. In economic news, the all-EU consumer confidence is due out later this morning. The index is expected to come in negative but less negative than in the previous month.

Asia Mixed, Rising Oil Prices Could Be A Problem

Asian markets were mixed after WTI hit a 6-month high in Monday trading. The Shanghai Composite was the only index to close with a loss, -0.50%, but there was little conviction in other markets. The Hong Kong Hang Seng closed unchanged while the Kospi rose 0.17%, the Nikkei 0.20%, and the Australian ASX 0.90%.

Chinese indices were also weighed down by news released yesterday. The Chinese government let it be known it was considering structural reforms versus fiscal policy as a means of stimulating economic activity. The news, while good for the long-term, means any policy stimulus the market was expecting is likely not going to come.

Oil prices are surging on a combination of factors that equal one thing; tightening supply. The current move was sparked by the U.S. decision to end waivers for Iranian oil and likely to carry WTI and Brent higher in the near to short-term.

Cautious Market Waits On Earnings, EU Closed For Holiday, Oil Prices Surge 3%

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

The U.S. futures are indicating a slightly lower open on Monday as traders eye a week filled with earnings reports. This is the peak week of the Q1 earnings cycle and so far reports are mixed. The average S&P 500 company is beating the consensus estimate but not by a lower than expected margin. The consensus estimate for first-quarter growth increased by a tenth over the last week but remains firmly negative at -3.9%.

This week we can expect reports from 150 S&P companies or 30% of the index. Monday’s news included earnings from Haliburton. The oil-field services company reported better than expected EPS and sent shares up more than 3%. Later this week reports from PG, UTX, VZ, TWTR, EBAY, MSFT, AMZN, TSLA, SBUX, and XOM will be in the spotlight.

There is not much in the way of economic data this week but what there is could be market shaking. There are only a handful of reports due during the week including New Home Sales, Durable Goods, and Initial Jobless Claims. The important data will come out on Friday in the form of First Quarter GDP. First Quarter GDP is expected to be near 2.2%, if there is any sign of weakness equities could plummet.

EU Markets Are Closed For Easter

EU markets are closed for Easter Monday and will reopen on Tuesday. Traders get a reprieve from economic data this week, there is very little, with the ECB Economic Bulletin topping the list. The Bulletin is due out on Wednesday and may have some impact on earnings, ECB and interest rate outlook.

Asian Mixed, Oil Surges As President Trump Ends Iran’s Oil Waivers

Asian markets were mixed in Monday trading. The Australian ASX and Hong Kong Hang Seng were both closed for Easter Monday while trading in China, Korea, and Japan went on as usual. Japan led the market with a gain of 0.08% despite weakness in index heavyweights Softbank, Fast Retailing, and Fanuc. The Korean Kospi was the second-best performer with a gain of 0.02% despite a -1.60% decline in chipmaker SK Hynix. The Shanghai Composite posted a much larger move at -1.70%.

Today’s uncertainty is heightened by rising oil prices. The price of Brent and WTI both spiked more than 2.5% after word hit the market the U.S. was ending the waiver program for Iranian oil. The goal is to drive Iranian exports to zero in an attempt to force political change within Iran.

Futures Rise On Data, Global Equities Mixed, Trade Deal Draws Near

The U.S. Equities Rise After Strong Data

The U.S. futures were trading flat to slightly down in early pre-market trading. The index futures began to rise shortly after 8:30 AM following the release of today’s economic data. The date includes Retail Sales and Jobless Claims figures that both point to consumer health.

The jobless claims figures fell to a new 5+ decade low while retail sales rebound nearly double the consensus estimate. The news is reassuring for markets but comes with a caveat. Improving consumer health and rising wages will lead to future FOMC rate hikes.

Not all of the data was good; the Philly Fed’s Manufacturing Business Outlook Survey fell to 8.5 versus an expected 10.4. This data shows expansion within the manufacturing economy but at a much slower rate than predicted.

In earnings news shares of Sketchers fell hard after it reported 1st quarter results. The shoe-maker says revenue fell short of estimates and provided weaker than expected guidance. The news sent shares of that stock down nearly -10% in early trading. Meanwhile, shares of shipping giant Union Pacific were holding flat after it reported earnings. The company says revenue missed expectation by a narrow margin and EPS was slightly above consensus.

Global Equities Mixed In Light Session; Earning, Data, and Trade Are In Focus

European indices were flat and mixed in early Thursday trading. The DAX and CAC were about equal with gains near 0.35% while the UK FTSE was posted a loss near -0.15%. The moves were driven in part by today’s PMI data, data which was better than expected but still contractionary. The news at once alleviated and confirmed the fear of economic slowdown within the EU. The news also left traders in doubt that an expected rebound would occur later this year.

PMI data from Europe was mixed. While composite and services indices among individual member nations were positive the all-EU figures are less than expected. On the manufacturing front, PMI fell -0.1% versus an expected gain of 0.2%. This leaves the EU manufacturing sector in the contractionary territory and may drag the economy down with it.

In corporate news, shares of Gucci parent Kering fell more than -3.0% after it released earnings. The company narrowly beat consensus on the bottom line but provided lack-luster guidance. The news was not well received as it confirms further slowing in the EU economy. Next week Europe’s big banks are scheduled to report and may shed new light on economic health.

Asian Equities Mostly Lower Despite Trade News

Asian equity indices were mostly lower despite positive trade news. The latest word is that Chinese officials are looking at President Trump’s travel plans looking for possible dates for a summit. The top choice is Trump’s scheduled visit to Japan at the end of May. The trip is a good choice because it would allow a meeting on neutral ground and fits the timeline for an expected deal.

The Korean Kospi was today’s loss-leader with a decline of -1.43%. The Japanese Nikkie followed with a loss of -0.84% with the Shanghai Composite and Hang Seng both down about -0.40%. Softbank led the Japanese market lower with a loss of -2.16% while China Construction Bank and Samsung led markets lower in China and Korea. The Australian ASX was the only index to advance. The ASX was supported by better than expected labor data that points to stability in the Australian economy.

Markets Brace For Earnings, Optimism Is Fading, Slower Growth Confirmed

The U.S. Markets Brace For Peak Earnings

The U.S. futures were indicating a mildly higher open for the equities markets on Wednesday. The Dow Jones Industrial Average was trailing with a gain of 0.15% while the S&P 500 and NASDAQ Composite were both up more than 0.25%. The move is fueled by optimism for earnings but tempered by concerns as the peak-earnings season begins. This week marks the beginning of peak season, we can expect to hear from 75% of the S&P 500 over the next two and a half weeks.

In today’s news, shares of Morgan Stanley rose after the banking giant reported better than expected results. The company says revenue and EPS fell from last year but both came in above consensus estimates. EPS of $1.33 beat by $0.13 as net interest income and wealth management revenue grew. Earnings were also aided by lower compensation expenses. The company says they had a slow start to the year but expect momentum to build as the year progresses.

In economic news, the U.S. trade deficit with China fell -25% over the last month. The decline puts the deficit at its lowest level in nearly a year and is driven by increased exports to China. Net exports from the U.S. increased by $2.3 billion while imports increased by only $0.6 billion. Later today traders will be looking to the FOMC’s Beige Book for the lastest read on broad U.S. economic activity.

European Markets Mixed, Optimism Is Fading

Optimism that the global economic slowdown isn’t as bad as feared is fading. The data from around the world confirm the slowdown is not as bad as forecast. The problem is tat in so doing, the data confirm the economy did indeed slow down. Along with this are a growing number of earnings reports, Netflix most notably, that include weak earnings guidance. The combination is not likely to lead to bear market but may induce a market correction sometime in the near future.

The EU equity indices were flat and mixed in early Wednesday trading. The German DAX was leading with a gain greater than 0.30% while the French CAC was close behind. The UK FTSE 100 was the only declining index with a loss near -0.10%. In stock news, basic resources were leading declining sectors with a loss near -1.0%. Miners like Rio Tinto and BHP Group fell more than -2.5% after Vale announced it would reopen its Brazil iron mine within 36 hours. Shares of Commerzbank jumped more than 2.0% after ING offered an unsolicited takeover bid.

Chinese GDP Confirms Slower Growth Is At Hand

Chinese 1st quarter GDP confirms that China’s economy has slowed. The good news is that the 6.4% read is a tenth better than expected and helps assuage the fear of further slowing. Analysts agree the news shows China’s stimulus efforts are working, the risk now is the PBOC will reconsider its last round of QE. Along with the data is new on March Industrial Production and Retail Sales, both of which came in above 8.5% and beat forecasts.

The Shanghai Composite led advancing indices with a gain of 0.29% with the Nikkei just behind at 0.25%. The Hang Seng, Kospi, and ASX were all lower at the end of the session. The biggest move was made by Australian paint supply company DuluxGroup after it received a takeover bid. Shares of the stock jumped more than 27%.

Earnings Blow Past Expectations, Equities Edge Higher, Fear Of Recession Evaporates

Bank Earnings Blow Past Expectations In The U.S.

A highly anticipated round of earnings from big banks JP Morgan and Wells Fargo blew past expectations. JP Morgan beat on the top and bottom lines citing the positive impact of higher rates. Higher rates from the FOMC means banks and other lenders can charge more for their services and loans.

JP Morgan also says the outlook for U.S. economic activity is stable and the consumer is strong. Wells Fargo turned in a likewise positive report beating on both the top and bottom lines. The takeaway from that report though is this, earnings and revenue are better than expected but still down from last year.

The U.S. indices were indicated to open moderately higher on Friday. The Dow Jones Industrial Average led the market with a gain of 0.80%, about 215 points, while the S&P 500 and NASDAQ posted more modest gains. While today’s earnings reports are better than expected they are but two among 500 reports and the market remains cautious.

EU Markets Edge Higher

European markets were moving higher in tandem with U.S. futures. The German DAX led with a gain near 0.60% at midday with the FTSE and CAC up about 0.3% and 0.35% respectively. Traders in the region cheered on the earnings news but remain cautious over the global economic outlook.

On the economic front, EU industrial production slowed less than expected. The all-EU Industrial Production figures came in at -0.2% MOM and -0.5% YOY which are both much better than forecast. The figures confirm slowing within the EU economy but at a much slower rate than expected and helped to stabilize the EUR versus the USD. The EUR/USD advanced 0.60% on the news and set a new two-week high.

In stock new shares of GN Store Nord jumped nearly 7.0%. The company has issued revised guidance to a range higher than previously stated.

Asia Mixed As Earnings Season Kicks Off

Asian equities markets were mixed on Friday. Most indices closed with gains but the action was not in synch. The Australian ASX led with an advance of 0.85% with the Japanese Nikkie following at 0.77% and the Korean Kospi trailing with a gain of 0.41%. Chinse indices in Shanghai, Shenzen, and Hong Kong all fell in Friday action. The Hong Kong Hang Seng led decliners with a loss of -0.22%.

In stock news, shares of Japanese retailer Fast Retailing led the market with a gain of 8%. The company says revenue grew 6.8% in the first half of the fiscal year and soundly beat forecasts.

In economic news, the Chinese trade surplus surged in March to a new high. The surge is due to a larger than expected gain in exports, nearly double, and a much larger than expected decline in imports. The news is both good and bad. Good in that it shows China’s economy is still doing OK, bad because trade balance imbalances are a sticking point in the trade negotiations.

Trade Hopes Lift Stocks, Brexit Deadline Extended, Chinese Inflation At 5 Month High

Trades Hope Is Supporting Equities Ahead Of Earnings

Trade hope is supporting equities in early Thursday trading. The U.S. futures are pointing to a modestly higher open, about 40 points for the Dow and a comparably low figure for the S&P 500 and NASDAQ Composite. Hopes are driven by tantalizing evidence the U.S. and China are coming close to a trade deal. Yesterday, Steve Mnuchin said negotiators had basically agreed on an enforcement mechanism, a development pointing to a quick end to the talks.

The FOMC minutes are also helping to support indices. The minutes were mixed, some members think rate hikes are still coming, but the consensus is no more rate hikes this year. The committee is committed to its dual stance of patience and data dependency. They will patiently wait until the data tells them it is time to cut or hike rates again.

In economic news the PPI and jobless claims data were both better than expected. The PPI came in at 0.6% and double the consensus. On a YOY basis PPI is up 2.2% which is also above expectations and tops the FOMCs 2.0% target. This data shows a rebound in the economy forecast by the FOMC and helped strengthen the dollar.

Brexit Deadline Extended, EU Markets Get Reprieve

Theresa May and the UK got a reprieve from the EU late yesterday. The EU has granted a flexible 6-month extension to the Brexit deadline staving off a potentially market-shaking hard-Brexit. The extension comes with an admonishment from the EU; use this time wisely. EU markets responded with a sigh of relief but the news was not enough to spark a rally. The FTSE 100 was trading near flat at midday while the DAX and CAC were both showing modest to moderate gains.

Traders are cautious if hopeful after yesterday’s ECB meeting. The ECB held rates steady but reinforced its newly dovish stance citing increased downside risks to the economy. The bank will continue with its TLTR-III plans and may increase those facilities if needed.

Asia Mixed After Chinese CPI Hits 5 Month High

Asian markets were wildly mixed on Thursday with a definite bearish bias. The Japanese Nikkei posted the only advance and that was a slim 0.11%. Shares of Fast Retailing did most of the heavy lifting but it rose only 0.50%. The Korean Kospi was unchanged while shared in Australia, Hong Kong, and mainland China all fell. Australia made the smallest decline at -0.40% while the Hong Kong Hang Seng shed -0.93% and the Shanghai Composite dropped -1.60%.

Chinese consumer inflation rose 0.4% in the last month and is up 2.3% over last year. This is the highest level in 5 months but slightly below expectations. The rise is driven by a seasonal rise in vegetable prices as higher prices for pork. Chinse farmers are culling their pigs in an attempt to control the spread of fever. The food index rose 4.1%

IMF Downgrades Global Growth, Inflation Weak In U.S., Brexit Summit Begins

The U.S. Market Is Unfazed By Weak Data

The U.S futures were indicating a slightly higher open in early pre-opening trading. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite were all up 0.10% to 0.15%. The move comes despite a downgrade to global growth from the IMG and weak inflation data at home.

The IMF says global growth will only be 3.3% this year, down another 0.20%, and the second major downgrade this year. According to them, downside risks prevail and the solution is in the hands of world governments. The IMF says a coordinated effort (ie resolving trade disputes) is needed.

On the economic front, U.S. CPI data was mixed. The headline 0.40% MoM and 1.9% YoY were both hotter than expected but core data was weak. Stripping out food and energy CPI rose a tepid 0.1% and 2.0%, both below consensus estimates. The dollar barely moved on the news.

The ECB Holds Rates Steady, An Emergency BREXIT Summit Is About To Begin

In Europe, the ECB held rates steady as expected. The bank did not issue any major changes in its policy statement and intends to continue on with TLTRO-III. The European Central Bank has had to backtrack on its plans to tighten policy later this year and may increase QE if the data doesn’t alter its trajectory. There was no data from the EU today.

In England the data was good. UK GDP grew faster than expected over the last 12 month period. The monthly data shows a 0.20% increase which is as expected but the YOY read is hot at 2.0%. Industrial and manufacturing production were both hot in the last month as well, helping to drive strength in the UK economy. The news is good for Brexit too because it shows confidence among the British people.

In Brexit news, Theresa May is headed to Brussels for an emergency summit with UK leaders. Among the dignitaries, she will meet German Chancellor Angela Merkel and EU Council President Tusk. May is expected to ask for an extension to the Brexit deadline, President Tusk is in favor of a flexible one-year deal.

Asian Markets Mixed, Data And Earnings Are In Focus

Asian markets were mixed in Monday trading following the IMF’s downgrade. The Japanese Nikkie fell -0.53% leading the declining indices despite positive moves in index giants Fast Retailing and Softbank. The Korean Kospi led advancing indices with a gain of 0.49%. It was supported by a tech-led really that had SK Hynix up 1.0%. The Shanghai Composite and Hang Seng were both hugging break-even levels while traders wait on new trade data.

In Australia, the ASX advanced only 0.03%. The index was weighed down by a near 10% drop in Crown Resorts after it yesterday’s 20% rise. The leaked news Wynn Resorts was interested in buying the company caused Wynn to pull out of talks. Now it looks like there is no Wynn for Crown Resorts.

Earnings And Data In Focus, Trade Tensions Rise In EU, Asia Flat But Traders Optimistic

The U.S. Futures Are Flat In Early Trading

The U.S. futures are flat to mildly negative in early Tuesday trading. Traders are waiting and watching for key economic events that may determine the future of interest rate policy in American. Tomorrow the CPI Consumer Price Index will be released at 8:30 ET and followed at 2 PM by the FOMC minutes. This data will be compounded by the PPI Producer Price Index on Friday along with the first major earnings reports of the season.

JP Morgan and Wells Fargo are both slated to report earnings on Friday. The outlook for EPS is mixed for both, it is most likely negative the question is how bad? Next week earnings from Citigroup and Bank of American highlight a massive round of reports from the financial sector.

In economic news, the NIFB, the National Federation of Independent Businesses, released its index of small business sentiment. According to them, small business sentiment moved up over the last month to 101.8 making the second month of improvement. Later today the JOLTs report will be released. The number of open jobs has been trending up and at all-time highs for years, there are no surprises expected.

Trade Tensions Rise In The EU

Now that U.S./China trade relations are on the mend Trade Ambassador Robert Lighthizer has turned his focus toward the EU. He has issued a list of EU goods for proposed tariffs worth $11 billion dollars. The tariffs are in retaliation for aircraft subsidies the WTO has ruled harmful to U.S. business. The EU responded saying only the WTO can determine the level of fine but that is a point President Trump is not likely to concede.

EU markets were flat to mildly negative in midday trading. The UK FTSE 100 and French CAC were both up about 0.05% while the German DAX was down about -0.25%. The proposed tariffs range from aircraft parts to wine causing shares of Airbus and beverage producers volatility. Shares of Airbus fell nearly -2.0%.

Asia Flat But Optimistic As Earnings Season Approaches

Asian markets were mostly flat but closed with small gains in Tuesday trading. The move is cautious but optimistic ahead of the earnings season and what many expect to be a positive end to the trade war. The Hong Kong Hang Seng led advancing indices with a gain of 0.27%, the Shanghai Composite posted the only loss with a decline of -0.16%. The Australian ASX, despite big moves in energy, closed at 0.01%.

In stock news shares of Tencent led in Hong Kong. The tech-giant posted a gain of 0.50%. In Australia energy was strong with shares of Santos and Beach Energy advancing 3.0% and 5.45% respectively. Shares of Crown Resorts led the market though, gaining 20% on word it was a takeover target for Wynn Resorts.

Earnings Season Begins, Equities Markets Mixed, Trade Hopes Take Back Seat

The Q1 Earnings Season Is Set To Begin

The U.S. futures were indicating a modestly lower open in early Monday trading. The move is one of caution as traders await the first major reports of the Q1 2019 earnings cycle. By all accounts, this should be the first quarter of negative earnings growth since 2016.

Earnings expectations have taken a dive over the last quarter on signs of slowing economic growth. If the S&P 500 falls short of expectations it could send the broad market moving sharply lower. The Dow Jones Industrial average led the major indices with a loss of -0.25%. The S&P 500 and NASDAQ Composite were both looking at losses near -0.10%.

In trade news, reports out of China indicate “new progress” has been made. The news follows the conclusion of last week’s high-level trade talks in Washington and suggests headway has been made on key issues. Key issues yet to be resolved include forced tech transfers, treatment of intellectual property, and the trade balance.

In earnings news, banks JP Morgan and Wells Fargo are set to report on Friday. Both are estimated to report flat to slightly higher earnings from the year-ago period. Next week earnings season will kick into high gear with reports from several dozen important S&P 500 companies. Later today traders will be looking for the Factor Orders data around 10 AM.

European Equities Cautious As Brexit Draws Near

European equities markets were flat and mixed in midday trading. Investors in the region are cautious ahead of this week’s earnings events and the upcoming Brexit. Brexit is slated for April 12th, Friday, and can only be avoided if the UK Parliament reaches consensus on Theresa May’s deal or the EU grants another extension. Theresa May is expected in Brussels later this week for a summit of EU leaders, she is expected to formally request another extension at that time.

The FTSE 100 was up in early trading, about 0.05%, and matched by the French CAC. The German DAX was down about -0.25%. In stock news, shares of SAP fell -1.5% after another of its top executive’s leaves. Shares of Euronext, France-listed equities exchange, moved higher after it was approved to purchase a Norwegian stock exchange. Shares of Safran, the supplier of engines for Boeing’s Max-8, fell after Boeing cut production outlook for its most popular jetliner.

Asia Mixed After Strong U.S. Labor Data

Strong labor data on Friday helped push the U.S. indices to new highs last week. the positive sentiment did not carry over into Asia where indices were without direction in Monday trading. The Australian ASX led advancers with a gain of 0.65% on strength in mining and energy while the Japanese Nikkei led decliners. The Nikkei fell about -0.20% while the Shanghai Composite fell -0.05% and the Hang Seng and Kospi both posted small gains. Traders in the region will be looking out for the FOMC minutes on Wednesday, word on trade, and earnings.

Labor Leads Market Higher, Trade Hopes Stoked, A New Consensus Has Been Reached

The U.S. Labor Data Is Strong

The U.S. nonfarm payrolls report was much better than expected and helped lift equities in early trading. The headline 196,000 is 20,000 above consensus and strengthened by positive revisions to both January and February. Data within the report shows unemployment held steady at 3.8% while average hourly earnings increased by 0.1%. Average hourly earnings are up 3.2% from last year and driving consumer health. The Dow Jones Industrials, S&P 500, and NASDAQ Composite were all edging higher in early premarket trading and then extended those gains to 0.5% after the NFP release.

In trade news, both President Trump and Vice Premier Liu He issued positive statements following their Thursday meeting. Vice Premier Liu He says a new consensus has been reached in regards to the text of the agreement in progress. He delivered a message to Trump from Chinese President Xi Jinping to the effect substantial progress has been made and he hopes a quick resolution can be reached. President Trump says they are making swift progress and a deal is possible within the next four weeks.

European Markets Are Mixed At Midday

European equities were flat and mixed at midday as traders digest the latest trade news. The good news is that both sides are positive on progress, the bad news is the timing of the deal has been pushed back another two weeks. The DAX was trading the weakest, hovering near 0.0%, while the other major indices were up about 0.25%. Basic resources led the gains with an advance of 0.50%. The sector has extensive exposure to China and is sensitive to trade news.

Growth concerns are weighing on sentiment despite the trade news and U.S. labor data. Yesterday’s decline in German Factory Orders only the latest in a round of data pointing to slower growth. Compounding negative sentiment is an expected downgraded growth forecast from Italy. Italy is expected to reduce its GDP forecast to only 0.1% after projecting 1.0% at the end of last year.

In stock news, shares of Italy-listed Saipan shot to the top of the charts in early trading. The driller announced $200 million in new contracts that could fuel revenue long into the future.

China Closed, Asia Mixed

Trading in Asia was mixed as traders wait on concrete trade news. The Japanese Nikkei led the advance with a gain of 0.38% with shares of Fanuc and Hitachi Construction in the lead. Both companies have exposure to China and are sensitive to trade news, both stocks advanced more than 1.15% in Friday trading. In economic news, Japanese Household Spending increased by 1.7% but less than expected.

The Korean Kospi posted the second largest advance, 0.14%, despite a warning from Samsung 1st quarter profits could be down as much as -60%. The Australian ASX was the only index to post a loss. Markets in the Greater China region were closed for a holiday.

Brexit Moves Asia, May Secures Binding Concessions, U.S. Inflation In Focus

Brexit News Lifts Markets In Asia

Surprise Brexit news released in the early hours of Tuesday morning may allow U.K. lawmakers to reach consensus. Theresa May announced, with Juncker at her side, that she had reached legally binding changes. The changes are intended to smooth over the Irish Backstop issues but already face criticism. She and Juncker announced a trifecta of joint measures that includes an instrument, a statement, and a unilateral declaration of intent.

The news, unfortunately, hit a snag later in the morning when UK AG Cox said the concessions leaves the U.K. at risk. MPs are expected to vote on the Brexit deal today. If they decide to vote down May’s deal there are a half dozen or more possible outcomes including hard Brexit. There are only 17 days left until the Article 50 deadline and May needs 116 votes to pass the deal.

The Nikkei led indices higher in Asia. The Japanese index advanced 1.71% with shares of mainland Chinese stocks right behind. The Shenzen Composite was up almost 1.70% with the Shanghai Composite trailing at 1.10%. The Korean Kospi was up a tepid 0.90% with the Australian ASX posting a slight decline. Energy led in Asia and was supported by rising crude prices.

EU Markets Mixed After May Announcement

EU markets were mostly higher in early trading but turned mixed by midday. The series of Brexit Announcements inspired hopes that were soon dashed. Along with the caution expressed by AG Cox, EU President Juncker says this is the UK’s last chance. There will be no third chance or re-assurances on top of reassurances. The FTSE led advancing issues with a gain near 0.36% but traders were cautious.

The German DAX and French CAC both posted losses near -0.30%. German Finance Minister Olaf Scholz confirmed Commerzbank and Deutschebank were exploring a merger. Shares of both stocks slipped in today’s trading following a strong rally on Monday.

The U.S. CPI Confirms Pause And Patience Are Correct For FOMC

The U.S. markets were trading mixed on Monday despite the Brexit news and an as-expected read on consumer level inflation. The Brexit news was taken with a grain of salt, the Brexit deal has been brewing a long time with many twists and turns, and the CPI isn’t the good news it could have been.

Consumer level inflation rose 0.2% as expected. The core reading was reported as 0.1%, which is below expectation, as is the year over year comparison. On a year over year basis headline CPI rose 1.5% with the core at 2.1%, both lower the previous month and confirmation of slowing economic activity. The good news is that the FOMC is less likely to raise rates this year but that wasn’t enough to spark a continuation of Monday’s rally.

The S&P 500 and Nasdaq Composite were both hugging the flat-line in early futures trading. The Dow Jones Industrial Average was down about -0.25% as shares of Boeing drug on prices. Boeing is still under pressure following Monday’s crash of a 737 Max-8 jetliner, today’s news includes a downgrade of the stock from Edward Jones.

Risk Appetite in Asia Surges as UK Prime Minister May Secures Brexit Assurances

The major Asia-Pacific indexes are trading higher on Tuesday, following the lead of the strong finish in U.S. markets. Strong gains in U.S. technology shares are also carrying over to Asian tech companies.

Rising investor sentiment is signaling increasing demand for risky assets. This is being fueled by the news that British Prime Minister Theresa May managed to secure last minute support from the European Union for her Brexit deal before it goes to a crucial vote on Tuesday.

At 02:42 GMT, Japan’s Nikkei 225 Index is trading 21493.88, up 368.79 or +1.75 percent. Hong Kong’s Hang Seng Index is trading 28857.25, up 353.95 or +1.24 percent and South Korea’s KOSPI Index is at 2153.90, up 15.80 or +0.74 percent.

In China, the benchmark Shanghai Index is trading 3063.77, up 36.78 or +1.21. In Australia, the S&P/ASX 200 finished at 6200.80, up 20.60 or +0.33 percent.

Improving Risk Appetite

Shares in the U.S. and Asia are rebounding after last week’s dismal performance. Stocks trended lower last week on rising concerns of a global economic slowdown. The weakness was fueled by disappointing trade balance news from China and a plunge in the number of new hires in the U.S. in February.

The Asian-Pacific markets got an early boost from strong gains in U.S. technology shares on Monday, led by a stellar performance in shares of Apple. Stocks extended their gains early Tuesday as investors increased bets UK Prime Minister May could secure a divorce deal before Britain’s scheduled March 29 departure from the EU.

May Secures Brexit Assurances

Risk appetite jumped early Tuesday as speculative buyers reacted positively to the news that U.K. Prime Minister Theresa May might be closer to securing approval for her Brexit deal.

According to reports, May won legally binding Brexit assurances from the European Union, in a last ditch attempt to sway rebellious British lawmakers who have threatened to vote down her divorce deal in a parliamentary vote on Tuesday.

CNBC reported that at a news conference with European Commission head Jean-Claude Juncker late on Monday, May announced three documents aimed at addressing the most contentious part of the exit deal she agreed in November – the Irish backstop.

“The Irish backstop is an insurance policy aimed at avoiding controls on the sensitive border between the British province of Northern Ireland and EU member Ireland.

Bullish traders are betting there can be some negotiation or at least a compromise on both sides. They are more than offsetting the bearish traders who are betting the deal will get rejected.

Asia Rebounds On Monday, Europe Higher Ahead Of Key Brexit Vote, Boeing Leads Dow Lower

Asian Markets Move Higher Despite Weak Data

Asian markets were mostly higher in Monday trading despite a round of weak data last week. Data from China showed exports plunged -20% while in the U.S. February job creation was a tepid 20,000. The two data points confirm an economic slowdown in the first quarter but were shrugged off in favor of optimism.  Markets are still hopeful there will be a positive resolution to the U.S./China trade war and encouraged by the PBOC. The PBOC says it will work to improve economic activity and won’t manipulate the exchange rate to do it.

The Shanghai Composite led the market globally with an advance of 1.92%. The mainland Chinese index was followed by a 0.97% rebound in the Hong Kong Hang Seng. The Japanese Nikkei gained 0.47% in Monday trading led by Nissan. Shares of the embattled automaker moved up about 1.0% on word ousted CEO Carlos Ghosn was seeking permission to attend an upcoming board meeting. The Korean Kospi gained 0.03% in quiet trading while the Australian ASX fell -0.38%. Nearly all sectors moved lower in Australia with energy in the lead.

Europe Moves Up With Brexit In The Crosshairs

European markets were broadly higher in a morning of quiet trading. The UK FTSE was in the lead as traders eye a series of key events this week. The lesser of this week’s events is a Euozone-wide meeting of finance ministers that begins today. The ministers are expected to discuss Brexit in preparation for an ECOFIN meeting on Tuesday.

More importantly and crucial to the Brexit process is a vote in Parliament slated for Tuesday. If the MPs fail to pass legislation accepting Theresa May’s Brexit-Deal it will trigger a series of votes beginning on Wednesday. The first vote would be whether to accept hard-Brexit or not, the remainder of the votes to be determined by the outcome of the first.

The FTSE advanced about 0.35% in midday trading with the DAX and CAC not far behind. Financials were among today’s top performers after Commerzbank and Deutschebank announced a possible merger. Shares of both stocks moved sharply higher with Commerzbank up 4.5% and Deutschebank up 2.5% on the news.

 Boeing Leads Dow Lower After Second Crash In Five Months

Shares of Dow heavyweight Boeing led the Dow lower after one of its 737 crashed after take-off. The crash resulted in the deaths of 157 passengers and is the second deadly crash in two months for one of its most popular jets. Use of the Jets was suspended by China, Indonesia, and Ethiopia pending investigation of the crash. The news does not bode well for BA which recently announced robust sales and strong backlogs driven by the 737 Max-8.

The Dow dropped -200 points on the news but nearly of all of the decline is due to Boeing. The broad-market S&P 500 and tech-heavy NASDAQ Composite were both showing small gains in early pre-market trading. Economic news in the form of Retail sales helped support the market after coming in better than expected. Retail sales grew 0.2% in January, much better than the -0.1% forecast by economists.

This is an important week for U.S. data. The calendar includes a read on CPI, manufacturing, housing, PPI, and another round of retail sales on Friday. Friday will bring the February Retail Sales which was delayed due to the Government Shut-down.

China Plummets On Weak Trade Data, Brexit Looms Nearer, U.S. Labor Markets Weaker Than Expected

Chinese Equities Indices Plummet On Weak Trade Data

Mainland Chinese equities indices fell -4.4% or more on weaker than expected trade data. New data shows dollar-denominated exports from China fell more than -20% in February. Economists had been expecting exports to fall in light of the ongoing trade impasse but this data blows away their wildest predictions. Consensus export data was expecting a fall near -5.0%. Imports also fell more than expected, -5.2% versus -1.4% expected, and result in a weak read on China’s trade surplus.

China’s trade surplus fell to $4.12 billion, a mere 15% of the expected $26.83 billion and a number that will drag on global GDP outlook. The caveat is that the week-long Lunar New Year Holiday may have impacted the data. Other indices in the region were down hard as well but none posted quite the loss seen in China. The Hong Kong Hang Seng fell -1.91% weighed down by exposure to China, while the Korean Kospi and Australian ASX fell -1.31% and -0.96% respectively.

EU Markets Move Lower As Brexit Looms Closer

The EU equity indices were lower at midday as a plethora of local and global issues drag markets lower. While it is hard to say which fear is dominating sentiment it is safe to say that Brexit, trade war, Chinese data, and Italy are all part of the mix. In Brexit news, UK lawmakers are still wrangling over the Irish Backstop and have yet to form a consensus. The EU has urged the UK Parliament to submit some proposals by this weekend in order for them to have something to vote on next week. As of now, the parliament is expected to vote on Theresa May’s deal as written with little chance of passage.

The UK FTSE 100 was in the lead in midday trading posting a loss of -0.90%. The German DAX was down about -0.65% with the French CAC trailing with a loss of only -0.50%. In stock news shares of Debenham’s and Vonovia bucked the bearish trend posting double-digit gains. Debenham’s moved 14% higher on news its CEO would give up his CEO role with another company in order to focus on business. Vonovia moved 16% higher on its earnings report. Revenue and EPS were much better than expected and forward guidance is favorable. Shares of GVC, however, fell -16% after its CEO sold shares.

Futures Down On Bad Data

U.S. equity futures were down in early trading and then weakened after the non-farm payrolls report was released. The number of new jobs in February came in at only 20,000, 160,000 below expectations and sent the Dow Jones Industrial Average down 200 points. The caveat is that the margin of error for this data point is near 200,000 and other data within the report was very good. The U6 unemployment shows “real” unemployment is lower and wages are rising. Wages rose 3.4% over the last 12 months the fastest rate in ten years.

Today’s action is going to be dominated by the last two days events. Between the ECB, China, and the NFP the market has received a triple shot of bearish news that will weigh on equities prices.

Asia Mixed As Trade Concern Lingers, ECB Restimulates EU Economy, Huawei Sues U.S.

Asian Markets Mixed As Trade Concerns Linger

Asian markets were mixed in Thursday trading as lingering trade concerns weigh on sentiment. The lack of news over the past days has traders on edge as they try to anticipate the markets next move. The Hong Kong Hang Seng led losses with a decline of -0.89%.

The Japanese Nikkei posted the second largest decline, -0.65%, as fears of slowing in China sapped strength from the tech sector. Chip-heavyweight Renesas Electronics says it is cutting production at Japanese facilities for two months. The move is in anticipation of weaker Chinese Demand and shares fell more than -14.5%. Automation industry leader Fanuc also moved sharply lower and posted a loss of -2.80%. The Korean Kospi closed with a loss of -0.45% while the Shanghai Composite and Australian ASX were both able to make small advances.

ECB Holds Rates Steady, Announces Third Round Of QE

The ECB decided to hold rates steady at their policy meeting today. The move was as expected but came with some unexpected news. The EU central bank has lowered its targets for this year, pushed out its target date for rate hikes, and issued a third round of QE. The news was well taken by EU equity markets which were down in early Thursday trading but rebounded to post small gains after the news. The French CAC led with a gain near 0.25% and closely followed by the German DAX. The UK FTSE was hugging the flat-line as Brexit fears dampened the mood.

The ECB says it will provide a new round of funding for EU banks. The funding will come in the form of TLTRO-III and is intended to help EU banks with their lending. The ECB also pushed back the target date for the first interest rate hike until first quarter 2020 at the earliest. The bank had been indicating a hike as early as the third quarter this year. The ECB also lowered its 2019 GDP target to 1.1%, down a half percent, and cited mounting geopolitical worries. The EUR/USD fell a half percent on the news and is now sitting at a key support level.

U.S. Futures Flat After ECB Announcement, Huawei Goes To Court

The U.S. futures trading indicated a flat to positive open for the major indices in early Thursday trading. The broad-market S&P 500 led but the advance was only 0.10%. The ECB news was well received and help support indices that had been trading negative in the earliest portion of the electronic session. Markets are still concerned over the U.S./China trade deal, the longer we go with no news the worse it will be for the market.

In corporate news, Huawei, embattled Chinese tech-firm, has taken the U.S. to court. The company alleges the U.S. government has acted unconstitutionally by forbidding its companies to buy Huawei products. The claims is based on the principle of due process. Huawei says its rights were violated when the Trump administration singled them out in a ban on Chinese tech.

On the economic front, both weekly jobless claims and 4th quarter productivity were better than expected. The jobless claims figure came in at 223,000 and near long-term lows while productivity increase 1.9% in the 4th quarter. Analysts had been expecting 1.3%. The increase in productivity is good news for the economy because it shows wage gains are sustainable and not a threat to inflation.

Global Stocks Mixed, Trade Deal In Focus, Retail Earnings Surprise Wall Street

Asian Markets Were Mixed In Tuesday Trading

Asian markets were in Tuesday trading with mainland China in the lead. The Shanghai Composite closed the day with a gain of 0.88% with the Shenzen component advancing nearly 3.0%. The move comes as the Chinese Peoples Congress begins and Premier Li Keqiang issues a warning to the people. He says China faces a “though struggle” in the face of a “more complicated environment”. The warning comes with a downgrade to 2019 GDP but one fully expected by the market. China now expects to see official GDP figures come in between 6.0% and 6.5% for the year, the slowest pace of growth since 1990.

Elsewhere in the region trading was less buoyant as investors wait on trade-related news. In Hong Kong stocks were up a little more than 0.1% while most others closed with losses. The Japanese Nikkei shed -0.44% led by a -1.78% decline in Softbank while the Korean Kospi fell al little more than -0.50% on weakness in shares of SK Hynix. The Australian ASX posted a slightly smaller loss, about -0.30%, following the latest policy statement from the RBA. The RBA has held rates steady with a warning economic slowdown may last longer than expected.

European Markets Mixed As Politics Takes Center Stage

The EU equities indices were mixed in early Tuesday trading as politics takes center stage. Uncertainty over the U.S./China trade deal and the Brexit is coming to a crescendo. Both issues may be advancing in a positive manner, trade more so than Brexit, but there is no guarantee yet either will be resolved. The UK FTSE 100 was in the lead as UK and EU officials meet once again in Brussels. The meeting is another in a series of attempts to smooth the wording of key issues of Theresa May Brexit Deal so the MPs will be able to reach consensus. The DAX and CAC were both down about -0.25% at midday.

In stock news shares of telecom companies were up about 1.0%. The move was driven by Vodaphone’s announced issuance of 4 billion in mandatory convertible-bonds. Shares of German chemical company Evonik advanced 4.0% on an announced divestiture of non-core units. Debenhams, a retailer, warned it would not meet a recently issued revenue guidance and shares fell -8.0%. Eurofins also moved lower, nearly -10.0%, on word it would reduce CAPEX M&A activity this year.

The U.S. Markets Are Flat Following Monday’s Rout

U.S. futures trading was indicating a flat open for the major indices on Tuesday morning. Traders are waiting for news on trade and on edge following Monday’s fall from key resistance targets. Secretary of State Mike Pompeo has gone on the record saying the two sides are on the cusp of a deal but still no details to soothe frayed market nerves.

Later today economic data in the form of services PMI and New Homes Sales may move the market.

In the meantime, traders will be focusing on retail earnings which are due out this week. So far the results are better than expected and this morning report from Target is the same. The company reports a solid top and bottom line beat that was driven by better than expected comps and a 25% increase in digital sales. The news was well received and helped shares of the stock advance more than 6.0% in premarket trading.

US/Sino Trade Deal Takes Shape, EU Up Despite Brexit Woe, Industrials Lead U.S. Market Higher

Trade Hopes Lift China To New High

The Shanghai Composite led Asian markets higher on Monday following a report from the Wall Street Journal. The report states U.S. and Chinese negotiators are moving closer to completing a deal. The story alleges the two sides are in the final stages although there is little detail as yet. What we do know is that China has offered to lower tariffs on a wide range of U.S. products from chemicals to autos while on the U.S. side it is possible we’ll most or all sanctions and tariffs imposed in the last year reduced or removed.

The Shanghai Composite moved above the 3,000 for the first time in over 8 months as it extends it march into bull-market territory. The Japanese Nikkei posted the second strongest gain, 1.02%, followed by a 0.52% advance in the Hong Kong Hang Seng. Shares of ZTE, key to the international trade debate, advanced nearly 2.0%. The Australian ASX posted a gain of 0.40%, led by the miners and materials sectors, while the Korean Kospi posted the only loss at -0.22%.

Trade Hope Lifts EU Market, Brexit Still A Worry

Trade hopes helped lift the EU indices in early Monday trading. The UK FTSE leading with a gain near 0.75%, the UK-centric index was supported by domestic news as well. On the Brexit front, the Irish PM has gone on the record suggesting an extension to Article 51 is probable. If passed, the extension would likely push out the date for Brexit to June. Theresa May, in other Brexit-related news, has initiated a $1.29 billion fund to aid less-prosperous UK towns in the post-Brexit period.

The French CAC was posting the second strongest move at midday, about 0.70%, with the DAX trailing at only 0.25%. In stock news, shares of UK tabloid Daily Mail moved up more than 4.0% because the company announced a plan to return $1.29 billion to shareholders. Shares of Rotork, also UK-based, fell more than -3.0% after it reported earnings and revenue below expectations.

Industrials Lead U.S. Markets Higher

While the trade-news is good, there are still some concerns lingering in the market. Details for the deal remain sketchy and there is little hope of significant headway on the core issues. The industrial sector helped push the U.S. equity indices higher in early Monday trading. The Dow Jones Industrial Average indicated up about 0.35% in the pre-market session. The move was in turn led by shares of industrial giants Caterpillar, Boeing, and Deere which all have extensive exposure to China.

Regarding the indices, the tech-heavy NASDAQ was in the lead with a gain near 0.55% followed by a 0.35% advance in the broad-market S&P 500. This week will be dominated by trade negotiations but traders should not discount the data. This week is full of key economic data from the U.S. including the all-important Non-Farm-Payrolls on Friday. The consensus is for job gains in the range of 190,000; so long as the twelve-month average remains above 200,000 the market should remain strong.

The more important data, found within the NFP, will be average hourly wages. Wages have been growing near 3.0% for some time and accelerating. The gains are underpinning strength in the consumer that is in turn supporting the U.S. consumer-based economy.

 

Equities Down On Trade Concerns, Brexit Still In Focus, Powell Testimony Begins In Washington

Asia Moves Lower, Lack Of Clarity Leaves Traders Cautious

Asian markets were largely lower on Tuesday. The move is in response to growing caution centered on the US/China trade negotiations. The negotiations are progressing rapidly towards a trade deal, news over the past few days has led the markets to new highs, but a lack of clarity about what a deal really means has led traders to rethink their positions. A trade deal could take many forms including one in which tariffs now in place remain in place.

Chinese equity indices fell about -0.65% in Tuesday trading after posting +5% gains in the prior session. Chinese markets have entered bull market territory, the Tuesday retracement does not alter that fact; the Shanghai and Shenzen Composites are still up more than 20% from their lows. The Japanese Nikkei fell about -0.37% with robot-maker Fanuc in the lead with a loss of -1.29%. The Korean Kospi fell -0.27% with international tech-giant Samsung down -1.25%

EU Market Sours On Trade, Brexit Still In Focus

Cautious trading was the name of the game in the EU on Tuesday as well. Shares in the region were down -0.16% to -0.90% with the UK FTSE in the lead at midday. The FTSE was in the lead because Brexit fears are simmering. Theresa May’s Brexit deal still faces stiff opposition and the Labour Party is front and center in those ranks. The Labour Party has submitted an alternate Brexit Deal for Parliament to vote on; if the alternate is vetoed Labor says it will call a “people’s vote” on whether Brexit should happen or not.

On May’s end of things, she says Parliament will be able to vote on her deal by March 12th. If the deal is not approved the Parliament will vote on ruling out a no-deal Brexit the following day and then vote to extend the Article 50 Deadline the day after that.

In business news UK construction supply company Travis Perkins shot to the top of the listings. The company reported better than expected revenue and earnings sending shares of the stock up by 11% in early trading. The earnings were aided by cost-cutting measures which are seen aiding the company long-term.

Powell Testimony Starts In Washington

Trade news is taking a back-burner today and this week now that the last round of talks has concluded. Optimistic but cautious traders will now turn their focus to FOMC Chief Jerome Powell who is slated to give the annual testimony to Congress. The testimony begins at 10 AM ET and last four days, the first two in the House of Representatives and the second before the Senate. He is expected to give a positive view of the economy, highlight risks (trade concerns/slowing growth), and outline the expected path of interest rate policy. He is not expected to provide any new information or viewpoints.

In stock news shares of Caterpillar fell more than -3.5% after it was downgraded. Analysts at UBS have downgraded the stock to sell citing weak 2020 revenue and slowing global construction demand. Shares of Home Depot were also moving lower in the early premarket session. The home improvement warehouse missed on the top and bottom line sending shares down -2.5%.

In economic news Housing Starts fell more than expected to hit a two-year low. Starts fell -11% for the month and -10% for the year as builders prepare for what may be a slow year for sales. The caveat is that the data is for December, delayed by the Government shutdown, and contradicted by more recent data suggesting real estate activity is picking up in the first quarter of 2019.

China Enters Bull Market, Trade Hopes Lift EU, Trump-Xi Summit In Sight

Asian Markets Entered Bull Market Territory As Trade Hopes Lift Stocks

Chinese equity indices surged more than 5.5% on Monday following news US and Chinese negotiators were making substantial progress on key trade issues. The news was backed up by Trump-Tweets to the effect he would delay the implementation of March 1 tariffs. The news is mitigated by the fact tariffs may still be levied if a final deal isn’t made. Regardless, the Shanghai and Shenzen indices are now both up more than 20% from their recent lows.

Elsewhere in the region stocks were buoyant but less so than in China. The Hong Kong-based Hang Seng led with a gain of 0.50%. Shares of China Construction Bank and ZTE were at the top of listings with gains of 2.3% and 2.2%. The Japanese Nikkei, aided by a near 1.0% increase in retail giant Fast Retailing, was close behind the Hang Seng at 0.48%. The Austrialian ASX and Korean Kospi were up 0.30% and 0.09% respectively.

Trade Hopes Lift, Brexit Woe Weighs, EU Indices Mixed

Trading was mixed in the EU on Monday because of trade hopes and Brexit woe fighting for dominance. On the one hand, trade talks are progressing quickly and promise to bring an end to trade-war between the US and China. The EU, also in the tariff-crosshairs, is expected to reach a tariff-avoiding deal with the US in the near future.

On the other hand, another delay in the Brexit process has traders worried hard-Brexit is unavoidable. Theresa May has delayed a key vote by Parliament because the wording on the Irish Backstop is still not acceptable. Because the deadline for Brexit is less than five weeks away there is a growing chance no deal will be reached.

The DAX was leading advancing indices at midday. The German index was up about 0.50% with the French CAC up about half that. The UK FTSE, understandably, lagged Monday trading with a loss near -0.25%.

In stock news, shares of UK home builder Persimmon were down -5.0% after lawmakers revealed it is under investigation. Lawmakers are concerned about practices relating to the Help To Buy Scheme. In Italy, banks led with gains near 2.0% after Fitch reaffirmed its BBB credit rating on the country.

A Trump/Xi Summit Is In Sight

Shares of US-listed stocks were moving higher in the early Monday session. The major indices were looking at an open near 0.55% in the premarket session as trade hopes intensify. Trump says “substantial progress” has been made on key issues like intellectual property rights and technology transfers. The news Trump would delay the March 1st tariffs was also compounded by emerging details about a Trump/Xi Summit. The summit is expected in late March and will be located at Trump’s Mar-a-Lago resort.

Shares of GE were on the move in early trading after it announced the sale of its biopharma unit for $21.4 billion. The deal includes $21 billion in cash that GE plans to use for deleveraging and balance sheet improvement. Barrick Gold has made an all-stock offer to merge with rival Newmont Mining. Newmont is already discussing terms to merge with Goldcorp, Barrick Gold says its deal is a superior offer.