European Stocks Hit Two-Week low ahead of PMI data

The pan-regional STOXX 600 index fell 0.6% by 0810 GMT after the prospect of U.S. tax hikes to pay for the large stimulus package spooked Wall Street overnight. [.N]

Meanwhile, the European Union is set to extend COVID-19 vaccine export curbs to Britain and other areas with much higher vaccination rates, and to cover instances of companies backloading contracted supplies, EU officials said.

All eyes will turn to IHS Markit’s March business surveys for the euro zone and the United Kingdom.

Chipmakers, including ASM International, ASML and BE Semiconductor, were the top gainers on STOXX 600, up between 3% and 5.3% after U.S. firm Intel Corp announced a $20 billion plan to expand its advanced chip manufacturing capacity.

Banks, retailers and travel stocks declined the most on recovery worries.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)

Spain’s Stock Market Supervisor Expects Record Six IPOs in 2021

“We could be speaking about half a dozen IPOs, which, if successful, would be the highest number since we have records at the commission,” Rodrigo Buenaventura, the head of the CNMV supervisor, said on Wednesday.

The rate of new listings is unlikely to continue though, Buenaventura added.

“It’s a positive phenomenon and great news for the Spanish market to have IPOs after two years with only two,” he said.

Spanish green energy producer Grenergy and solar equipment maker Soltec were the latest companies to debut on the local market in late 2019 and late 2020 respectively.

Other companies in the renewables industry, such as OPDEnergy, may follow suit, while larger companies such as Repsol and Acciona are planning to spin off and list their green energy assets.

(Reporting by Jesús Aguado; additional reporting by Emma Pinedo. Editing by Inti Landauro and Mark Potter)

European Supranationals Outlook: Path Clears for Euro-Denominated Green and Social Safe Assets

Download Scope Ratings’ 2021 Supranationals Outlook.

We believe the momentous shift in availability of safe assets in Europe reflects the national and supranational European fiscal stimulus to counter the Covid-19 shock, providing comprehensive safety nets for households, businesses and governments amid the pandemic, and financing a sustainable recovery in the coming years.

A sustainable recovery, green transition are Europe’s main policy priorities

European supranationals are adapting mandates and operating guidelines to ensure carbon neutrality by 2050, which, given the weight they carry in capital markets and policy making, will influence industry standards and affect investors and the private sector globally.

The EIB and EBRD, for example, are aligning their financing activities with Paris Agreement terms and raising their climate-finance-related objectives, while the EU, via its EUR 750bn Next Generation EU recovery fund of which about EUR 225bn will be issued in green bonds, will play a pivotal role in providing a safe, green asset in Europe.

Social bond issuance is also set to rise

But EU safe assets will not only be green. Social bond issuance is also set to rise markedly. The EU’s Support to mitigate Unemployment Risks in an Emergency (SURE) scheme of up to EUR 100bn has completely changed the landscape for supranational social bond issuance.

Of the EUR 100bn, EUR 53.5bn has already been borrowed and disbursed to 15 member states since an inaugural bond issue on 20 October 2020. With EUR 90.3bn requested overall, EUR 36.8bn is still to be raised, which is likely to be mostly concluded by the end of Q2 2021.

These programmes underpin the EU’s emerging role as a major contributor to sustainable finance in capital markets and, depending on varying investor demand for the different types of programmes, there is a possibility of distinct social, green and conventional curves in the future.

Open questions remain

Open questions remain: how much will the EU ultimately issue in bonds, how much will be green or conventional, and to what extent will it be more than matched by a greener greenback under the new US administration?

The Covid-19 outbreak also entails risks through possible deterioration in asset quality and higher leverage.

Still, while risks remain, European supranationals have strong credit profiles based on robust balance sheets and sizeable buffers, as well as rock-solid shareholder support. We expect credit profiles to remain resilient in 2021 as reflected in our current Stable Outlooks for supranational borrowers.

For a look at all of today’s economic events, check out our economic calendar.

Alvise Lennkh is the Deputy Head of Sovereign and Public Sector ratings at Scope Ratings GmbH.

Indices in Europe Start This Week With a Correction

American Indices continue the buying fiesta.

European indices, on the other hand, undergo a bearish correction.

Gold tries to create a right shoulder of the inverse head and shoulders formation.

EURUSD pair continue the correction inside a flag formation.

GBPUSD pair drop below 1.37 again.

AUDCHF with a triple top formation but so far without a proper sell signal.

GBPJPY bounces from the 142.2 again.

For a look at all of today’s economic events, check out our economic calendar.

2020 Kicks off with US-Iran and Climate Change Crisis

The start of the year was marred by the escalating tensions between the US and Iran while extreme weather conditions across the global triggered fierce debates about climate change.

What do we know so far about the tensions between Iran and the US?

  • Iranian-backed militia killed an American Defense Contractor
  • The US retaliated with missile strikes
  • The American Embassy in Baghdad was attacked
  • US airstrikes killed top Iranian military official, General Qassem Soleimani
  • Iran responded by launching missile strikes at two bases hosting U.S. forces in Iraq

As the world witnesses the rising tensions between the US and Iran, and a uniting Iran over the assassination of one of the most influential and powerful men, the downing of Ukraine International Airlines flight PS752 has caused an international outrage and brought internal division within Iran.

Beyond Economic War

The existential conflict between the US and Iran moved beyond an economic war. In 2019, the US announced further economic sanctions on Iran which brought the latter into a deeper recession. As a significant buyer of crude from Iran, China sees the situation as an impediment that can hurt its economy. The Iran risks may therefore overshadow the trade deal.

Investors have already pricedin some extent of the risks associated with Iran since President Trump pulled out of the 2015 nuclear deal and started to impose sanctions. Even though the headlines brought Iran back on the geopolitical risks radar and caused a spike in volatility, we do not see the conflict changing the investment landscape at this stage.

Climate Change

2020 is set to be the confirmation of a new era for climate change. As we entered a new decade, the extreme weather conditions around the world have forced leaders of many countries to reassess their actions over climate change and transform the global energy system.

In Australia, the unprecedented and raging bushfires across the country act as a warning to the world and has even challenged a reluctant Prime Minister to take more action

Energy Sector

Oil prices experienced their largest weekly drop since July 2019 despite the tensions in the Middle East. Coincidently, markets were hit by two contradictory themes for the oil and gas industry: Iran Risks and Climate Change.

Source: Bloomberg Terminal

It should be highlighted that the energy sector emerged as the worst-performing sector of S&P500 in the last decade. Investors are stepping into 2020 being accustomed to the global oil glut and the gradual shift in the oil and gas industry.

Iran risks fuelled expectations of a reduction in supply while the “green” shift lowers demand expectations.

Eyes are now on the US-China trade deal!

Stock Markets

Despite an erratic few weeks of trading, global stock markets have performed quite well:

  • Major equity benchmarks traded at a record high
  • US stock indices are trading higher by 1% and above
  • Most European Bourses are also experiencing similar gains
  • Australian benchmark outshines its peers with more than 4% gain
  • FTSE100 is lagging slightly behind with 1% gain

Brexit will remain the dominant factor for the UK markets. Despite the volatile year 2019, the FTSE100 posted two-digit gains. The Tory win had pushed the index above the 7,500 mark. Looking ahead, the Footsie is expected to rebound and investors are eyeing the next target at 8,000 level for 2020.

However, given that a large amount of earnings of the index is derived from overseas, an appreciation of the Sterling may hinder the performance of the FTSE100 to play catch up with its global peers.

Source: Bloomberg

Are Re-Pricing Risks Required?

The killing of the Iranian key commander took the markets by surprise. Heightened geopolitical risks have somehow become the new normal and unless there is any serious escalation, medium to long-term effect on the markets would be limited. In a new world of higher tariffs, de-globalisation, and historic low levels of interest rates, the most significant risks for 2020 are:

  • Trade deal outcome.
  • Central Banks.

Deepta Bolaky, Market Analyst at GO Markets.

Read Our GO Markets Review

About GO Markets

GO Markets was established in Australia in 2006 as a provider of online CFD trading services. For over a decade we have positioned ourselves as a firmly trusted and leading global regulated CFD provider. Traders can access more than 250 tradeable CFD instruments including Forex, Shares, Indices and Commodities.


Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

The Most Influential People of 2019

If we had thought that 2018 was a year to remember, we were certainly not disappointed with 2019.

The U.S and European equity markets hit record highs going into this week’s holidays and the extended U.S – China trade war ended in a phase 1 trade agreement.

Perhaps more so than in any other year, geopolitics gripped the global financial markets more so than the stats. There was monetary policy also in focus, however, as the markets went on a rollercoaster ride of rising expectations of a recession to economic euphoria.

Without a doubt, the U.S President continued to be the global financial markets’ main protagonist.

Donald Trump

The U.S President was the center of attention in 2019 and continues to be with a week to go as we approach a new decade.

It all started back in early 2018 when Trump hit aluminum and steel imports with tariffs. Few would have anticipated the U.S President to hold is ground for an unprecedented 20 odd months to deliver a phase 1 agreement.

When you throw in the USMCA, which finally got the seal of approval after a year of wrangling, it’s hard to argue against Trump’s success at making America great again.

In spite of continued economic growth, he even managed to get the FED to reverse rate hikes, while also standing his ground on foreign affairs. A prime example was the HK Bill in support of the HK protestors. Few would have allowed such a bill to pass at such a delicate time in U.S – China trade negotiations.

To be frank, many had argued that he would only have his first 100 days to deliver on campaign pledges…

They couldn’t have been more wrong.

What he plans to deliver going into next year’s presidential election campaign remains to be seen but it’s likely to be bolder than the last one…

Boris Johnson

Boris Johnson’s sheer political resilience and persistence deserve a top 5 position. After disappearing into the political wasteland alongside the likes of David Cameron, there was a swift revival in late 2019.

Theresa May, Brexit, and ritain were on the ropes. With a minority government, Johnson failed in Parliament with a string of defeats before defying the odds.

Contrary to the EU and the Establishment’s threats, Johnson garnered a revised Brexit agreement and even got Parliament to vote in favor.

He then forced a first December General election since 1923 to deliver the Tory Party’s best outing since Thatcher’s heyday…

The Tories are now with a sizeable majority and finally reunited, with the British PM in prime position to draw the best out of the EU over the next 12-months.

And let us not forget, his pal sits in the Oval Office, just across the Pond…

Jerome Powell

In a year where many failed to stand up against the U.S President, Trump’s nemesis managed to avoid delivering zero interest rates. In a calm and collected manner, the FED Chair steered the U.S economy away from a recession. Powell managed this without the fanfare that we saw with his predecessor.

Trump may lay claim to the sustained growth and optimistic outlook, but the FED Chair does need some if not, most of the recognition. After all, the phase 1 trade agreement only came into being in the final month of the year…

Nigel Farage

If Boris gets a mention then Nigel also deserves a spot in the top 5. Firstly, he upset the apple cart in the EU elections, raising anti-EU sentiment in Brussels. He was then also a key figure in the Tory Party’s euphoric victory in early December.

His decision to fall on his sword to deliver a Tory Party victory was a rare event in politics. He did ultimately ensure Brexit. The people responded in kind, giving Johnson his majority to wrap up Brexit by the end of 2020…

HK Rioters

While there may have been a few that got things going, it was the sheer numbers. The unity seen across HK through late 2019 deserves a spot. While the violence could have been avoided, Hong Kong’s will to retain its identity was an impressive one. It was some time ago when the world saw images of Tiananmen Square and Tank Man. 30 years to be precise.

There was not be a single iconic picture to resonate with. The length of the stand against China and outcome, however, was impressive. Beijing and the world saw firsthand just how passionate the Cantonese are in retaining their identity.

And finally,

Nancy Pelosi

In terms of U.S politics, it was a trailblazer year for the Democrat. She became the first-ever woman speaker of the U.S House of Representatives. If that wasn’t enough, she also delivered just the 3rd impeachment in history.

Anyone who achieves such feats deserves a spot in the top 5. She may not get to oust the U.S President, but she has certainly achieved political greatness. That’s quite remarkable when considering the political landscape.

Powell and Trump were both in 2018’s top 5. We now have Boris and Donald on either side of the Pond. It will be interesting to see who makes it into next year’s list…

2019 in a Nutshell and the Transit into a New Decade

If one is to describe the year 2019 in one word, we believe the word “uncertainty” would be the right fit. The world has entered 2019 with a high degree of uncertainty and is poised to finish the year with probably the same extent of uncertainties. The Global Economic Policy Uncertainty Index which is a GDP-weighted average of national EPU indices for 20 countries has remained in elevated levels in 2019.

Each national EPU index reflects the relative frequency of own-country newspaper articles that contain a trio of terms pertaining to the:

  • Economy (E)
  • Policy (P)
  • Uncertainty (U)

In simple words, the frequency at which newspapers cite “uncertainty” in relation to economic policy is high.

Source: Bloomberg Terminal

Sino-American Trade War

We have seen a de-escalation of trade tensions between the world’s two largest economies towards the end of the year. Investors grew hopeful that both countries will sign a partial trade deal. After weeks of speculations regarding the partial trade deal, “ a deal in principle” made headlines driving major US equity benchmarks to new highs. The optimistic statements in the US were not reciprocated to the same extent in China. It was a much muted and cautious response.

Any commitment and compliance from China remain murky.

The Trade Truce is being handed over to the financial markets like a Christmas gift. The real surprise will be unwrapping the gift and taking note of the details of the agreement. At the moment, vague promises and speculations are creating a “fragile” positive environment.

Uncertainties Persist! Phase One will ease but not eliminate uncertainties as Phase Two will handle challenging issues such as IT, Artificial Intelligence and cybersecurity and other hi-tech areas.

At CNBC’s Hadley Gamble at the Doha Forum, US Treasury Secretary Steven Mnuchin’s comments on Phase two was not inspiring:

“Phase Two maybe 2a, 2b, 2c, we’ll see….”

Populism and Globalisation

The growing prospect of populism comes with an array of uncertainties which is hard to ignore. President Trump’s presidency and Brexit are the bellwether of populism and have played a significant role in the recent volatility in the markets.

President Donald Trump

The Western political space is changing and is disrupting globalisation. The US President adopted a hard-line approach on not just trade, but also on migration and capital flows. The US has launched a trade war against major countries, some of which have been key allies of the US.

Brexit

Brexit Europe and the United Kingdom are practically on hold due to Brexit. The echoes of populism have threatened the existence of the bloc and have crippled its economy. Following the referendum for the UK to leave the European Union, the bloc’s members like Germany, Italy and France were also hit by several anti-establishment groups.

Hong Kong Protests

Hong Kong came to a standstill following months of democratic protests. The people of Hong Kong initially took to the streets to voice their frustrations on the extradition law. After the demonstrations intensified and turned violent, protesters laid five demands including an investigation into police brutality and the resignation of Chief Executive, Carrie Lam.

After more than six months of protests, economists are predicting a 1.3% contraction for 2019. The recent election resulted into an electoral win for pro-democracy parties which brought a semblance of normality after months of unrest.

Slowing Global Growth

Manufacturing Contraction

The manufacturing sector has been one of the main factors that had triggered concerns of a recession. In the US, the two widely- used indicators of the performance of the manufacturing industry are ISM and IHS Markit.

Both surveys consist of a diffusion that summarises whether the market conditions are expanding, staying the same, or contracting. Over the months, investors received mixed signals from both surveys. The divergence could partially be explained by the differences in the methodology used. Yet, the contrasting signals were noteworthy for investors.

As the year draws to an end, the preliminary Markit Manufacturing PMI figures for the US shows that it will be another month of steady growth fuelling hopes of a brighter start for 2020. On the other side, the ISM shows that the manufacturing industry has been softening for the past eight months and contracted for the fourth straight months at a faster rate.

Source: Institute for Supply Management

Interest Rates and Central Banks

Slowing global growth and recession fears have forced major central banks to cut interest rates to record lows. The Reserve Bank of New Zealand was among the first major central banker to commence a major easing cycle. After some resistance, the Fed and other central bankers has also cut their interest rates. The European Central Bank have even resumed the controversial quantitative easing to stimulate its economy.

Towards the end of the year, the concerns of slowing global growth have receded as global economic data has shown some signs that the downturn may be bottoming out. Central banks have paused the easing policies and appear less dovish when setting policies for 2020.

Stock Markets

A look at the performance of major global equity indices does not reflect the angst seen during the year. As of writing, the stock market is set to close the year on a strong note.

Two Digits Gains and Record Highs!

Chinese stocks have recovered strongly over the month. Despite a trade war, sanctions against public tech companies and slower economic growth, Chinese shares rallied. buoyed mainly by renewed optimism on the trade front.

Hong Kong Shares took a beating as months of protests have discouraged investment and compromised the country’s position as a financial hub. The US has also passed the bipartisan Hong Kong Human Rights and Democracy Act that could strip the city of its special trading status following annual reviews of its democratic freedoms. As of writing, the Hang Seng index was up by only 7%.

FTSE100 was primarily driven by Brexit-related events. Towards the end of the year, the index has been trading sideways, but the majority win by the Conservative Party has pushed UK stocks higher. However, the possibility of a hard-Brexit has tamed the rally.

World Equity Indices (% Change)

Source: Bloomberg Terminal

As the year comes to an end, we are seeing the dominant risks – trade and Brexit that have rattled the markets over the months moving in a positive direction.

Energy Sector

The energy landscape is changing over the increased concerns on climate change. The rise of renewables is altering the dynamics of the industry. The “Greta effect” and various extreme weather conditions are constant reminders that the climate crisis is not going away and governments will be forced to adjust policies to tackle climate change.

As we move into a new decade, we see that the energy sector has been left behind. Looking at the different sector of the S&P500, energy emerged as the worst performer.

The oil and gas industry is facing a supply glut and decreasing demand at the same time. Saudi Aramco’s IPO which is one of the biggest IPO was launched as a local affair reiterating the struggle to entice international investors at a time where the oil market is facing structural headwinds.

The deeper production cuts by the OPEC members and allies and less geopolitical tensions are currently supporting a fragile oil market.

2020 will be the confirmation of a new era…

Investors are navigating in an environment with historically high levels of policy uncertainty. As we step into a new decade, market participants will be familiar with:

  • A new world of higher tariffs
  • Peak globalisation
  • Climate change
  • A probable tech war between the US and China
  • Commodities gluts
  • Historically low levels of interest rates.

2020 is probably not the year for a recession. In the last two months, investors have priced-out the recessions risks. The optimism is mostly based on positive trade-related comments, central banks intervention and expectations of steady interest rate in 2020.

Still, Uncertainties Remain and 2020 could be as volatile as 2019!

Deepta Bolaky, Market Analyst at GO Markets.

Read Our GO Markets Review

About GO Markets

GO Markets was established in Australia in 2006 as a provider of online CFD trading services. For over a decade we have positioned ourselves as a firmly trusted and leading global regulated CFD provider. Traders can access more than 250 tradeable CFD instruments including Forex, Shares, Indices and Commodities.


Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.  Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

Safe-Haven Markets Showing Limited Reaction to Impeachment Inquiry

Another way to look at the impact of the impeachment inquiry into President Trump is to watch the reaction in the so-called safe-haven markets. During periods of unrest in the financial markets, investors tend to sell risky assets and move their money into Treasurys, gold and the Japanese Yen. We saw these textbook moves on Tuesday when investors trimmed their positions in stocks and move their money into the perceived safety of U.S. Treasurys, gold and yen.

No Overreaction by Investors

Early Wednesday, U.S. stocks are edging higher while Treasurys, gold and yen are moving lower. This tells me that investors are in sync with the news and not overreacting until they are presented with all the evidence.

Don’t get me wrong, the impeachment of a president is a big deal, but based on the early price action in the key financial markets, we haven’t hit the point of concern yet, and we may never get there if the investigation into President Trump’s alleged wrong-doings show he did not break the law.

What We Know So Far

All we know at this time is there will be an impeachment inquiry. This move was serious enough to encourage investors to sell stocks, and buy Treasurys, gold and Japanese Yen. The next reaction in these markets will be to the transcripts of the phone call between President Trump and Ukraine President Volodymyr Zelensky later today.

The early reaction in the markets indicates that investors don’t expect the transcripts to worsen the situation, but that the inquiry will continue until the President is completely exonerated or cleared.

News Discounted

The price action on Tuesday indicates that investors have discounted the latest news, which is essentially the start of the inquiry. The next move will be investors reacting to whether something serious is brewing, or that this is just another distraction for the President.

Is Past a Good Guideline?

According to CNBC, “Stocks have previously struggled when a president faces the possibility of impeachment. In 1998, the S&P 500 fell about 20% at one point from its high to its low as independent counsel Kenneth Starr ramped up his investigation of President Clinton for perjury and obstruction of justice, according to CFRA. The market would bottom as the House began impeachment proceedings and then would later recover all those losses and hit an all-time high in November of that year.”

Obviously, we’re not even at this level and may never even get there since the event may never rise above a formal inquiry.

Possibly No Big Effect on Market

“From strictly a market’s point of view, the question will be, is it likely to succeed, and it does, what does a [Vice President Mike] Pence administration look like, and what does that mean for the 2020 election,” said Ed Keon, chief market strategist at QMA. “It is unlikely to succeed because of the composition of the Senate. If you net it all out, the end result is likely to be the status quo. I don’t expect that to have a big effect on the market.”

Futures Fall, Higher Tariffs Go Into Effect, Chinese Markets Surge

The U.S. Futures Are Down On Trade Woe

The U.S. futures trade was indicating a lower open for the major indices on Friday. The broad-market S&P 500 was in the lead with a loss of -0.50% while the Dow Jones Industrials and NASDAQ Composite were close behind. The move is driven by souring sentiment as U.S. tariffs on Chinese goods jumps to 25%. The hike in tariffs casts a pall on trade negotiations and is backed up by another Trump Tweet. Trump says he is comfortable keeping the tariffs in place, there is no need to rush, a sign of serious trouble in the trade talks.

In economic news, U.S. consumer-level inflation remains tame. The CPI came in at 0.3% headline and 0.1% core, both off consensus by -0.01%. The year-over-year comparisons are equally tepid at 2.0% and 2.1% and do not encourage traders to think an interest rate hike will happen this year.

Global Markets Move Higher, Traders Are Optimistic

Indices in the EU and Asia were largely higher in Friday trading. In the EU, trading was led by the German DAX. The DAX advanced 0.75% in what may be a dead-cat bounce. The UK FTSE 100 and French CAC both advanced about 0.40% at midday. In economic news, the UK first quarter GDP came in at 0.5%. This is above expectation and the highest level since 2017. In the YOY comparison, UK GDP came in at 1.8% and as expected.

Shares of ProSeibenSat were among today’s leaders. The EU-based media company set the launch date for a new streaming service and saw shares rise by 6.0%. ThyssenKrupp saw its shares surge by 17% and lead the market. The company says it will IPO a portion of its elevator business and the market cheered.

The ThyssenKrupp IPO highlights a little-talked-about sector, infrastructure. There is a growing world need for infrastructure spending and elevators are a prime example. Older buildings need new elevators and new buildings that need elevators are being erected every day. Brookfield’s Public Securities Group, a leader in infrastructure investment, is another example. Larry Antonatos, a managing director and portfolio manager with the group, outlined several opportunities for growth in infrastructure during their quarterly market update. The parent company, Brookfield Asset Management, is in process of closing upwards of $33 billion in new infrastructure investment.

Chinese Markets Surge As New Tariffs Take Effect

Chinese markets surged as new tariffs took effect. Experts believe the tariffs do not affect goods in transit so there is still time for a trade deal to be struck. Vice Premier Liu He remains in Washington as a representative of China but not as Special Envoy as he was in past meetings. The Shanghai Composite led the advance with a gain of more than 3.0%. The Hong Kong Hang Seng made a strong advance too but only 0.84%. Elsewhere in the region, markets were mixed, the Nikkei fell 0.27% while the Australian ASX and Korean Kospi advanced about 0.25% each.

In trade news, Chinese President Xi Jinping says China will retaliate to the new tariffs and the threat of more.  He did not give specific details in his statement.

Trade Deal Broken, Global Equities Fall, The Bear Is Back

The U.S. Futures Fall After Trump Declares Trade Deal Broken

Trump, speaking before a rally in Florida, has declared the Trade Deal broken. He says China has broken the deal and tariffs are going to be raised on Friday. Conversely, China is still expected to send Vice Premier Liu He to Washington today in an effort to salvage the slowly disintegrating negotiations. The tech-heavy NASDAQ Composite was posting the biggest loss in early premarket trading, about -1.00%, while other major indices were close behind.

Shares of Revlon were moving higher in early trading despite a whopping miss on EPS. The company says revenue was in-line with expectations but EPS was hurt by one-time items. The company’s net loss was much less than in the previous year and guidance is optimistic. Shares of Lifetime Brands were flat after that company reported earnings. The maker of kitchen and lifestyle brands beat on the top and bottom line.

On the economic front, inflation data from the U.S. tamed in April. The April PPI came in at 0.2%, down from the previous month’s 0.6%, and below forecast. On a year over year basis, producer level inflation fell to 2.2%. This good news as it shows ongoing economic expansion but at a sustainable rate.

Global Equities Fall On Trump Tariff Threat

Global equities were moving lower on Thursday as well. The Trump tariff threat and discord at the negotiating table has traders on edge. The French CAC was in the lead with at midday with a loss of -1.25%. The German DAX and UK FTSE 100 were posting smaller losses at -0.90% and -0.45% respectively. The autos were leading losses at the sector level with most stocks in the red.

UK energy company Centrica was among the worst performers of the day. The stock saw its shares fall around -8.0% as sentiment for the company sours. Shares of Heidelberg Cement were moving higher in early trading, up about 2.0%, as infrastructure spending plans boost demand. Shares of Glaxo-Smith-Kline and Pfizer were both flat after the sale of GSK’s consumer health business to Pfizer was approved.

The Bear Is Back, Asia Falls On Trade News

Asian equities fell in Thursday trading as bearish traders gear up for a possible market correction. The Korean Kospi led with a loss greater than -3.0%, it, in turn, was led by Samsung and SK Hynix. Shares of the index heavyweights fell -4.0% and -5.0% respectively. The Hong Kong Hang Seng was the next biggest decliner at -2.4% followed by a -1.50% decline in the Shanghai Composite. Japanese shares fell an average -0.90%, led by Honda, with Australia’s ASX posting a small advance. Shares in Japan were led by Honda. Honda guided full-year profit up to 6.0% but shares fell nearly -5.0% anyway.

Trade Talks In Disarray, China Backpedals, Brexit Uncertainty Rears Its Ugly Head

The U.S. Futures Hit New Lows, Trade Talks In Disarray

The U.S. futures are indicating a down open in Wednesday trading as trade negotiations with China begin to unravel. Reports China had backpedaled on key aspects of the deal have led President Trump to raise tariffs to 25%. The tariffs will go into effect on Friday and may be avoided if only a deal can be reached. Chinese Vice Premier Liu He is still expected in Washington on Thursday and Friday but the odds are not in favor an accord will be made.

The tech-heavy NASDAQ Composite is in the lead in early pre-market trading, down about -0.60%. The Dow Jones Industrials and S&P 500 are down roughly -0.50% and -0.25% with Caterpillar, Ford, Nvidia, and Micron all moving lower. News from Iran isn’t helping matters. Iran is threatening to ramp up its nuclear program in order to stave off the effects of U.S. sanctions.

In earnings news, Disney and Fox are expected to report after the closing bell. Early action included reports from Barrick Gold and Wendy’s. Barrick Gold reported a much better than expected 16.8% increase in revenue for the quarter. This is the first quarter since the merger with Randgold and saw production increase 30%. Wendy’s beat on the top and bottom lines. Comp-store sales were better than forecast and margins improved. Guidance for the full year is in a tight three-penny range around consensus.

Brexit Uncertainty Resurfaces In The EU

European indices were mixed and flat at midday on Wednesday. The DAX was the only one in the green at 0.15%. The FTSE 100 and CAC were both down about -0.15%. While trade relations are at the forefront of everyone’s mind, Brexit uncertainty has reared its head again. The word on the street is that opposing sides in Parliament cannot reach an agreement and the talks may fall apart.

The autos and basic resources were the hardest hit sectors. They have a disproportionate exposure to China and are sensitive to trade news. Other sectors were also moving lower with shares of Imperial Brands and UK broadcaster ITV both shedding -5.0%. Both companies reported weak earnings, ITV at least is expected to launch a streaming service soon. Sales at Imperial Brands are likely to keep falling as tobacco use declines.

Trade Talks In Disarray, Japan Leads Asian Market Lower

Asian markets were broadly lower on Wednesday. Japan was in the lead with a loss of -1.40% but the Chinese Shanghai Composite and Hong Kong Hang Seng were close behind. The Australian ASX and Korean Kospi were also lower but the declines were much smaller, about -0.40% each. In China, weaker than expected trade data helped to send the market lower. Trade data for April shows a smaller than expected amount of exports balanced by a surprise gain in imports. While the overall trade balance was weaker than expected the trade surplus with the U.S. increased.

Trade Talks Roil Markets, Volatility Rises, Tariff Threats Loom Closer

Trade Tensions Rise, Market Calm Shattered

A series of Trump Tweets has roiled global markets. His threat to increase tariffs on Friday and to impose new tariffs soon has shattered the market calm. Futures trading in the U.S. indicates another big drop for equities and this may only be the beginning. The tech-heavy NASDAQ Composite with its heavy exposure to China and Asia is leading the losses on Tuesday. The index is indicated down about -1.0% with the Dow Jones Industrials and S&P 500 close behind.

Caterpillar and Boeing were among the days biggest losers, down -1.0% and -1.5% respectively, but there were not the only ones. Shares of Marriot Vacations were edging lower, about -0.15%, after missing top and bottom line expectations. Lumentum, maker of lighting and photographic solutions, saw its shares fall after beating consensus estimates. The company provided light guidance for the coming year and sent shares down about -0.70%.

In economic news traders will be waiting on the JOLTs report. The JOLTs report is a gauge of job openings and labor market confidence and is due out at 10 AM. The JOLTs report has shown job openings and labor market confidence trending at all-time highs. Later this week the PPI comes out on Thursday and the CPI on Friday.

Europe Moves Lower, FTSE 100 At A 1-Month Low

Equities indices in the EU moved lower on Tuesday. Traders are cautious about the U.S. tariff threat and how it may impact the EU. Not only is the EU in the crossfire between the U.S. and China it too must negotiate trade terms with the U.S. later this year. The UK FTSE 100 led the losses, down about -1.10%, and set a new one-month low in the process. Banks were among the worst performers, down 1.8% as a group, with Barclay’s and HSBC down more than 2.0%. The utility sector was among the best performers, up about 1.8% at midday.

Shares of BMW fell more than -2.0% after the automaker reported EPS fell -78.0% from last year. Thomas Cook, an airline, saw its shares surge more than 10% after Lufthansa confirmed it would put in a non-binding offer to purchase some assets. In economic news, German new orders rose from last month but not as much as expected. This comes after several months of contraction and does little to encourage investors.

Volatility Rises As Tariff Threats Loom Closer

The VIX index, the fear index, has risen to a six-week high on the back of Trump’s renewed tariff threat. The index is pointing to a major decline in global equities, Asia included. Asian indices were mixed on Tuesday but the action was muted. Chinese markets posted small gains but there were little more than a dead cat bounce. The Japanese Nikkie reopened after an extended holiday and fell -1.51%. Shares of Fanuc, heavily exposed to China, fell -3.0%. The Australian ASX was able to advance 0.19%, the Korean Kospi fell -1.0%.

On a positive note, China has confirmed that Liu He will still attend a delegation in Washington later this week. His attendance was questionable following the Trump Tweets but a good sign a deal is still possible.

Trade Talks Stall, Global Equities Dive, Global Growth At Risk

The U.S. Index Futures Fall 2.0% As Trade Talks Stall

The U.S. indices are down roughly -2.0% in early premarket trading following a breakdown in trade talks. The tech-heavy NASDAQ Composite was in the lead, down -1.90%, with the Dow and S&P not far behind. The move followed a series of Tweets from President Trump that have cast a pall on sentiment. Trump says he will increase tariffs on China from 10% to 25% starting on Friday. In addition, Trump says he will place tariffs on another $325 billion in Chinese goods if the talks don’t move forward soon.

Trump’s reason for the tariffs, a surprise to most in the market, is that the talks are progressing too slowly. The word that China is trying to renegotiate portions of the deal may have played a roll in the decision. According to one market participant, the new tariffs are a message to China not to bring any more empty offers to the table. China, scheduled to attend a final round of talks this week, has indicated it may pull out. Up until just yesterday many, including those close to the talks, had thought a deal was possible by Friday.

In economic news, last week’s non-farm payrolls figure was a blowout number. The data shows strong increases in jobs, wages, and unemployment and belies fears of an economic slowdown. The catch is that an increase in trade tensions may cause an additional slowing in global economic activity.

Europe Falls On Trade And Data

European markets were not immune to the U.S./China trade news. Indices in the region fell an average -1.80% with downward pressure aided by weak manufacturing data. The Markit PMI data shows composite PMI in the Eurozone region held steady over the past month but data within the report was mixed. Likewise, EU retail sales came in a bit above expectations but still down more than 1.2% from the previous month. The UK FTSE 100 was closed for a holiday.

In stock news, shares of Apple fell -3.0% after news the European Commission would be opening an investigation. The investigation comes after complaints filed last year by WhatsApp. Others in the tech space, specifically the chipmakers, were also down hard in early Monday trading.

Trade Talks Stall, Global Growth At Risk

With trade talks stalling global growth is at risk. Nowhere was that risk felt stronger than in China where equities fell more than 5.0%. The Shenzen Composite led the losses with a decline of -7.0%. The Hong Kong Hang Seng lost only -3.0% but was still down hard in Monday trading. The Australian ASX and Korean Kospi were down about -0.80%.

Chinese Vice Premier Liu He is scheduled to visit Washington this week. He expected to bring a 100-person delegation for a final round of trade talks. The last indications were that a deal was possible by Friday. China has responded to Trump’s tariffs with surprise saying they were unexpected.

Equities Rebound, Strong Labor Data Lifts Stocks, All-Time Highs In Sight

Equities Rebound After Strong Labor Data

The U.S. equities rebound after stronger than expected labor data. The much-anticipated NFP report blew past market expectations posting an increase of 263,000. The consensus estimate was only 196,000. Other data within the report was also bullish. The unemployment rate fell 0.2% to 3.6%, a 60-year low, while average hourly earnings rose 3.2% YOY. The good news is the rise in wages is coupled with increased productivity. The Q1 labor costs fell due to rising productivity so bears no impact on the inflation outlook.

The NASDAQ Composite futures were leading in early pre-market trading with an advance of 50 points. The Dow Jones Industrials and S&P 500 were both looking at similar gains, up about 0.35% and 0.40% respectively. The markets are now within spitting distance of new all-time highs. New all-time highs are likely to be set in Friday’s session.

Earnings reporting was light on Friday morning but there were still some of note. Weight Watchers saw its shares rise 14% after it reported cost-cutting efforts had helped it beat estimates. Newell Brands, makers of Rubbermaid and other household brands, reported a strong quarter as well sending its shares up more than 3.0%. Mercado Libre, an e-commerce platform serving Latin American, was also a big winner after reporting strong earnings. The merchant says revenue and items sold beat consensus and shares rose 13%.

EU Markets Up After Data

The EU equities indices were broadly higher in Friday trading after better than expected CPI. The pan-EU CPI rose better than expected at both the headline and core levels reducing expectations for ECB policy easing. The headline CPI is 1.7%, rising 0.3% from the prior month, while the core CPI is 1.2%, 0.2% above consensus. The data is still weak in regards to the ECB’s 2.0% target but shows reacceleration and should give policymakers more confidence in the economy.

The UK FTSE 100 posted the strongest gains in midday Friday trading, 0.75%. The German DAX and French CAC were both solidly higher but gains were more moderate at 0.40% and 0.30%. In earnings news, Societe Generale saw its share move higher after reporting a 26% decline in net profits. The banking giant says its restructuring efforts are bearing fruit and shares advanced 3.0%. Another big player in the banking industry, HSCB, also beat consensus expectations and saw its shares rise 2.0%.

Asia Mixed, Traders Eye U.S. Labor Data

Asian markets were firmly mixed after yesterday’s weak session in the U.S. The Japanese Nikkei is still closed for holiday’s. Gainers and losers were evenly split, two and two, with both mainland China and Hong Kong moving higher. Those indices advanced about 0.50% each while the Australian and Korean markets moved lower. The Australian ASX fell a mere -0.04%, basically unchanged, while the Korean Kospi fell a more substantial -0.74%.

In trade news, there is some expectation a trade deal could be announced as early as next Friday.

Futures Flat After FOMC Statement, Global Markets Mixed, Wage Inflation Eases In U.S.

The U.S. Futures Are Flat After The After The FOMC Statement

The U.S. futures are indicating a flat to a slightly negative open for the major indices on Thursday morning. The move follows a -0.75% decline in the S&P 500 on Wednesday sparked by Jerome Powell’s comments. FOMC Chief Powell says low inflation is transitory and the Fed stands ready to act when needed. This stance hints at no cuts to interest rates this year, a situation largely supported by the data.

Today’s data includes the weekly read on jobless claims and a key read on labor costs and productivity. On the jobless claims side of the equation, claims held steady over the last week. Continuing claims, those requesting the second week of assistance, rose slightly from a downwardly revised figure. Both figures have shown some volatility over the past few months but remain consistent with long-term economic health. Tomorrow’s NFP report will be closely watched. The market is expecting a strong 213,000 and that estimate may be low.

In earnings news, Under Armour reported before the bell and beat on the top and bottom line. The company is benefiting from strong labor trends and increased consumer spending shares advanced more than 5.0%. Shares of Dunkin Donuts were right behind with a gain near 5.0%. The iconic coffee and snack brand also reported better than expected revenue and earnings. Conversely, Tempur Sealy, a mattress maker, saw its shares fall -3.6% as competition and input costs weigh on results.

The EU Markets Are Mixed, Manufacturing Contracts For Another Month

The EU indices are flat and mixed at midday as Fed Chief Jerome Powell’s comments work their way through the market. Trading in the region was also affected by weaker than expected manufacturing data and the dovish tone in the BOE statement. On the economic front, all-EU Manufacturing PMI rose a tenth to 47.9, better than expected, but yet below 50 and firmly contractionary. The data is another indication the EU is suffering from protectionist policies and international trade relations.

The BOE, for its part, voted unanimously to hold rates steady at today’s meeting. The bank cited international risks related to trading conditions and the Brexit. With manufacturing in contraction and other signs of weakness, it is possible the BOE could lower rates sometime this year.

On the earnings front, shares of BNP Paribas jumped more than 1.0% after it released results. Shares of Dutch financial firm ING fell -1.5% after it reported a narrow miss.

Asian Equities Mixed, Japan Is Still Closed

Equities in Asia were mostly higher as markets return from a holiday. The Shanghai Composite, Hong Kong Hang Seng, and Korean Kospi all posted gains between 0.40% ad 0.85%. The Australian ASX was the only market to post a loss, -0.59%, but that is not surprising as it was the only market open on Wednesday. The Japanese market remains closed for the enthronement of their crown prince.

The U.S. Labor Market Surges, Mayday In Europe, FOMC Meeting In Focus

The U.S. Futures Are Up On Labor And Earnings

The U.S. index futures are pointing to a solid open in early Wednesday trading. The NASDAQ Composite is in the lead with a gain near 0.65%. The tech-heavy index is supported by strong results from Apple. Apple’s quarterly report includes better than expected revenue, EPS, and guidance.

Shares of Apple were up more than 5.0% in early trading and helped to lift the entire tech sector. Shares of AMD, chipmaker, also rose 5.0% after the company reported better than expected first-quarter results. AMD is the second global chipmaker in two days to beat EPS and revenue consensus.

The Dow Jones and S&P 500 were both up about 0.35% in early Wednesday trading. Both the broad market and industrials were aided by the ADP data. The monthly ADP report on private-sector job creation blew past expectations and shows broad strength in the labor market. Job gains were centered in medium-sized businesses and the services sector but significant gains were made in virtually all other categories. This data foreshadows PMI data due out later this morning and the NFP report due on Friday.

Most EU Markets Closed, London Falls -0.05%

Most major EU markets were closed on Wednesday for the annual Mayday holiday. The London exchanges were open with the FTSE 100 posting a small decline. The move comes amidst a flurry of earnings reports from home and abroad that have relieved some fear of earnings growth slowdown.

Shares of supermarket retailer Sainsbury advanced nearly 4.0% in early Wednesday trading. Sainsbury’s preliminary EPS report is better than expected. Strength in Sainsbury was offset however by weakness in homebuilder Persimmon. Persimmon says they are lowering forward guidance due to rising costs and lower than expected bookings.

Most major Asian markets were closed today as well, if for differing reasons. The Australian ASX was the only index in action in that region and it posted a gain of 0.80%. The index was supported by strength in the financial sector. The financial sector rose an average of 2.0% led by the so-called Big Four.

On the trade front, the U.S. and Chinese leaders have indicated the two sides are well on their way to closing a trade deal. According to U.S. representatives close to the talks, the deal could be closed in a matter of weeks.

The FOMC Is In Focus, A Policy Statement Is Due Out Soon

The FOMC will conclude their April/May meeting today, the policy statement is due out at 2:00 PM. The committee is not expected to alter its policy stance at this meeting but they may alter the course of future policy. The market is expecting a 65% chance of rate cut by the end of the year. The problem is that those expectations are not supported by the labor data. Today’s labor data points to steadily rising wage inflation and that, coupled with rising input costs for businesses, is not a recipe for lower interest rates.

Futures Flat, Traders Eye Earnings, Global Economic Expansion Continues

The U.S. Futures Are Flat In Early Trading

The U.S. futures are flat in early Tuesday trading. Traders are anxiously waiting on a deluge of earnings reports and an FOMC policy statement due out tomorrow. The major indices were all hugging the flatline with industrials posting gains and the tech sector small losses. The market has just reached new all-time highs so price action over the next few days is extra-important. A failure to maintain these highs or weak follow-through could result in a major price correction.

In earnings news, McDonald’s posted better than expected top and bottom line growth on strength in comp sales. Comp-store sales were reported up 5.4% which is 2.0% above the consensus estimate. Shares of McDonald’s rose more than 3.0% in pre-market trading. Shares of GE were also moving sharply higher, +10.0%, after it beat revenue expectations and doubled the EPS consensus. Google parent Alphabet was not so lucky. The Internet giant reported weaker than expected and saw its shares fall -7.0%.

Today’s economic data includes the Employment Cost Index. The Employment Cost Index shows a 0.7% increase in wages and benefits during the first quarter, in line with expectations. Costs of employment rose 2.8% over the trailing 12-month period which is also in line with expectations. The data shows steady increases in wage inflation but not at a pace to worry the FOMC. The FOMC is not expected to alter policy at this meeting.

Global Equities Mixed, EU GDP Better Than Expected

European equities were flat and to down at midday in Tuesday trading. The CAC led with a loss near -0.25% with the DAX and FTSE closer to break-even level. The move is despite a better than expected read on GDP so raises doubts about future market gains. EU GDP was reported at 0.4% MOM and 1.2% YOY which both beat consensus estimates. The news is a relief for troubled markets but does not alter the possibility of further slowing in the EU economy.

Basic resources were among the biggest losers. Their exposure to China and weak manufacturing data from that nation had the sector down more than -1.5%. Glencore led the decline with a loss of -4.0%. Chip-maker AMS was up nearly 20% at midday. The company, an Apple supplier, reported better than expected and provided an upbeat outlook for the year. Apple reports after the close of U.S. trading today.

Asia Mixed, China Rises Despite Weak Data

Asian equities were firmly mixed at the end of trading on Tuesday. The Shanghai Composite was the only index in the green, up about 0.50%, despite weaker than expected PMI data. The official manufacturing PMI and small-cap Caixin PMI both fell from the previous month to just above 50. The readings show expansion in the sector but at a slower pace than before and below expectations. The Hong Kong Hang Seng, Australian ASX, and Korean Kospi all closed with losses between -0.5% and -0.70%. Trade talks are expected to continue this week. Earlier in the week, U.S. Treasury Secretary Steve Mnuchin said the talks had entered the final laps.

Traders Brace For Big Week, Global Markets Mixed, The FOMC Is On Tap

The U.S Futures Are Flat In Early Monday Trading

The U.S. futures are indicating a flat to slightly mixed open on Monday morning. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all hugging the flat-line with moves less than 0.25 points each. Traders are bracing for another big week and the possibility of market-moving news. On tap this week is a meeting of the FOMC and a big round of economic data. Also on tap is another 164 earnings reports from S&P 500 companies.

The earnings season has been good if without any major headlines. To date, 46% of the S&P 500 has reported with 77% of those beating estimates. The average S&P company is beating consensus by 5.3% which is above the long-running average. The bad news is that guidance has been overwhelmingly negative. Also of concern is a notable increase in margins attributable to tariffs and rising wages.

Rising wages will be a concern of the FOMC at their policy meeting this week. The U.S. Federal Reserve Board is not expected to alter policy but may alter their statement. The recent round of data shows economic stability with low inflation although there is some concern. Wage inflation is rising much faster than core-inflation and may bleed into other areas of the economy. Today’s PCE Price index shows core inflation rose at a tepid 0.1% MOM and 1.8% YOY.

The EU Markets Are Mixed As Positive Sentiment Fades

The EU equities markets were mixed at midday in Monday trading. A weaker than expected read on sentiment and surprise election results in Spain were weighing on prices. On the economic front, the EU Business and Consumer Survey, and the Business Climate Survey came in below expectations.

The Business and Consumer Survey has fallen for 10 straight months and is now at a 2-year low. The decline is due to a variety of factors including Brexit, trade relations, slowing global economies, and politics.

On the political front, a snap election in Spain produced some surprising results. The ruling socialist worker’s party won the election but did not secure enough seats to form a government on their own. Conversely, the ultra-right wing VOX party won 24 seats.

Ins stock news shares of Bayer fell to the bottom of the rankings after its annual shareholder meeting. The companies shareholders did not ratify the board’s decisions of 2018 which include the purchase of Monsanto. Monsanto is an agricultural chemical company while Bayer a pharma company. There have been questions as to why the deal was done.

Asia Mixed, Japan Closes For Ten-Day Holiday

Asian markets are firmly mixed on Monday following the strong GDP numbers from the U.S. on Friday. The Korean Kospi led the market with a gain of 1.70% on strength in Samsung. Samsung is expected to report earnings during the Tuesday session. The Hang Seng is the next biggest gainer with an advance of 0.97% while the Shanghai fell -0.77%. Caution is high in China as investors weight the possibility stimulus measures will be dialed back in the coming months. The Australian ASX fell -0.41%, the Japanese Nikkei is closed ten days for a national holiday.

 

U.S. GDP Blows Past Expectations, EU Flat On Earnings, Asia Moves Lower

The U.S. Futures Are Flat After Strong GDP Data

The U.S. futures had been slightly lower in early pre-market trading until the GDP figures were released. The first estimate for 1st Quarter GDP came in at 3.2%, more than half a percent above consensus, and negate fears of economic slowing. Consensus estimates had 1st quarter GDP, often the slowest quarter of the year, at a mere 2.5%. Within the report personal consumption advanced 1.2% and GDP prices advanced 0.9%. The GDP price increase is below expectation and well below the Fed’s 2.0% target.

Futures spiked on the news, erasing the mornings losses and then edging slightly higher. The move did not last long however, earnings and earnings outlook were not significantly affected. By 8:45 the Dow Jones was testing the lows of the morning, down about -20 points, with the SPX and NASDAQ right behind.

Today’s earnings news includes reports from Chevron and Exxon, both missed badly, and American Airlines which provided weak guidance. Both Chevron and Exxon beat on the bottom line but total revenue came in well below expectations. Shares of both stocks fell but Exxon was the leader by a wide margin. Shares of XOM fell more than -2.0% while shares of CVX hugged break-even. Meanwhile, American Airlines provided weak guidance citing rising fuel costs. American Airlines guidance was bad news for its investors but point to future profit gains for the energy sector.

European Markets Flat On Earnings

The EU equities markets were moving lower in Friday trading after a round of mixed earnings reports. The UK FTSE 100 was the biggest loser with a loss of -0.20% while the German DAX and French CAC were both trading near 0.05% higher. Media stocks led the market with an average gain of 1.0% but were not the news of the day. The news of the day comes from the financial sector where Deutsche Bank beat expectations but gave weak guidance. Shares of builder Skanska were the biggest loser, down more than -4.0%, after it reported a surprise loss.

Asia Moves Lower, Japan Prepares For Long Holiday

Asian markets were mostly lower in Friday trading, following the Dow Jones after its decline on Thursday. The mainland Chinese markets were hardest hit, down about -1.25% on average, with Korea and Japan trailing with losses of -0.51% and -0.22%. The Hong Kong Hang Seng and Australiana ASX were able to post small gains but less than 0.10%.

In Japan, traders are preparing for an extended holiday. The Japanese markets will be closed for ten days starting next week to celebrate the enthronement of Crown Prine Naruhito. Shares of index heavyweights were down across the board and led by Fanuc, Softbank, and Nintendo. Nintendo fell the hardest, about -1.32%, after providing overly cautious guidance for the coming year.

Futures Fall Sharply, EU Banks Disappoint, China Falls On Stimulus Fear

The U.S. Futures Fall After Key Earnings Miss Expectation

The U.S. Futures were indicating a sharply lower open for the Dow Jones Industrial Average. The blue-chip index was weighed down by poor results and outlook from heavyweight 3M. 3M, a global manufacturing giant, says EPS miss consensus, cut its full-year guidance, and cut 2,000 jobs from its workforce. The news had shares of the stock down 8.6% raising fear economic rebound in the second half may not be as strong as hoped.

Other major indices were also under pressure but results were mixed. The S&P 500 was hovering near break-even while the NASDAQ Composite was showing a slight gain. The tech-heavy NASDAQ was supported by Facebook and tech. Facebook says its results are better than forecast and provided a positive forward outlook. Analysts at UBS cited the company’s efforts to fix problems in a note to investors and raised their price target to $220. Earnings after the close of today’s session include Amazon, Ford, Starbux, T-Mobile, Intel, and Mattel.

In economic news, initial jobless claims jumped in the last week. The headline figure jumped 37,000 to 230,000 as volatility hits the data. This marks a sharp reversal from the previous week’s data, data that hit a fresh long-term low. The continuing claims figure held steady near 1.665 million while the total number of claims fell 132,000 to 1.757 million. Durable Goods Orders were also strong. Durable Goods Orders rose 2.7% at the headline and 1.3% non-defense ex-aircraft.

EU Bank Earnings Disappoint The Market

The EU indices were flat to down in early Thursday trading. The UK FTSE 100 led the decline with a loss of -0.50% while the DAX and CAC trailed with losses near -0.10%. The big mover in the region was the banking sector, down an average -1.0%, after earnings failed to inspire confidence. Shares of Barclay’s fell -3.0% after it revealed a -10% decline in YOY profits.

Pain in the financial sector was not limited to earnings. Shares of Swedbank fell -3.0% after it admitted to shortcomings in relation to anti-money laundering procedures. Shares of DeutscheBank and Commerzbank both fell as well. The two announced an end to their merger talks citing costs and risk as primary reasons. In other earnings news, shares of Nokia were moving lower after it reported an unexpected quarterly loss and missing expectations.

Chinese Markets Fall On Stimulus Fears

Asian markets were mixed on Thursday with China leading most indices lower. The Shanghai and Shenzen Composites both shed close to -2.5% as fear of stimulus, rather a lack of it, grips the market.

A recent round of better than expected data and a shift toward structural reforms threaten an end to easy money in China. The Hong Kong Hang Seng shed a more tepid -0.86% while the Korean Kospi fell only -0.48%. The Kospi could have fallen much harder considering today’s news. Korean GDP shrank -0.3% in the first quarter, unexpected, and the worst performance in 10 years.

The Japanese Nikkei was the only index to post a gain and that is 0.48%. The move was supported by the BOJ policy statement and a pledge to keep the interest rates low at least into 2020.