Opening Bell: China Slowdown Offsets Trade Hopes; Stocks Mixed, Oil Gains
Investing.com | Nov 27, 2019 13:11
Asia market exuberance this morning, fueled by yesterday's additional day of new Wall Street records, was trimmed back as the day progressed, pressured by China's shrinking economy which weighed on U.S. futures—including for the S&P 500, Dow Jones and NASDAQ—and European shares. The opening advance in the STOXX Europe 600 Index slipped, with declines in travel and leisure companies offsetting gains for miners.
Contracts on the major U.S. indices whipsawed, as prices struggled to maintain the recent sharp incline that's been driven by repeated record-breaking U.S. sessions. On the hourly SPX chart, the 3144 level has been a significant support/resistance position in maintaining the uptrend.
Equities rose across Asia except in China, as investors monitored Sino-U.S. trade negotiation developments. Australia’s ASX 200 outperformed (+0.93%) after the country’s central bank laid out a road map for rate cuts and quantitative easing.
h2 Global Financial Affairs/h2China’s Shanghai Composite underperformed (-0.13) as the Asian country's industrial profits fell 9.9% in October, on an annual basis. It was the sharpest decline for the metric in eight months, fueled by falling demand both domestically and abroad. This marks the seventh month of slowing growth for the world's second largest economy. Chinese sales managers report the worst conditions on record, with both manufacturing and services in contraction. Nevertheless, the yuan strengthened.
Yesterday, U.S. President Donald Trump declared that talks on the first phase of a deal were nearly done after negotiators from both sides spoke by telephone. Nevertheless, the path to an actual resolution is rife with potholes. U.S. support for Hong Kong's pro-democracy protestors, via Congressional legislation currently sitting on the president’s desk, is something of a potential ticking time bomb, with ongoing conflicting reports about Trump's intentions—whether he'll sign or veto.
Adding to the dizzying array of geopolitical hurdles making life for investors even more difficult there's the U.S. president's reelection bid even as the possibility of impeachment looms. And finally, there's China’s consistently shrinking growth. Still, the market has remained optimistic, relying on the incentives for a trade resolution on both sides: China’s economy and Trump’s reelection.
Get The App
Yields, including for the U.S. 10-year Treasury note, are falling, for the fourth straight session, moving below the long-term downtrend line since November 2018. The activity is set to challenge a recent uptrend line since Nov. 1 of this year—while rates range within a short-term rising channel since the Sept. 3 bottom.
The dollar climbed, fluctuating below its highest level since Sept. 23, while the USD trades within a rising channel since Nov. 1.
Bitcoin, as expected, reached its lowest level since May 10, as it moved below $6,900 before reversing higher.
Oil held on to two days of gains, as optimism that a limited trade deal is getting closer offset an industry report showing an increase in U.S. crude stockpiles. Technically, the price is trading a third of a percent below the highest level since Sept. 17, near the top of a rising channel.
Investors are awaiting fresh U.S. home sales data, a key measure of inflation, and Washington’s latest quarterly estimate of economic growth, both to be released later today.
h2 Up Ahead/h2- U.S. consumer spending data is due Wednesday, along with initial jobless claims and durable goods orders.
- The U.S. celebrates Thanksgiving on Thursday; equity and bond markets will be closed.
- Euro-area inflation for October is due on Friday.
- The Bank of Korea sets policy on Friday.
- The Stoxx Europe 600 Index increased 0.1%.
- Futures on the S&P 500 Index gained 0.1%.
- Spain’s IBEX 35 climbed 0.1%.
- The MSCI Asia Pacific Index jumped 0.3%.
- The MSCI All-Country World Equity Index advanced 0.1%.
- The Dollar Index gained 0.15%.
- The yield on 10-year Treasuries dipped less than one basis point to 1.74%.
- Germany’s 10-year yield fell two basis points to -0.37%.
- Italy’s 10-year yield declined one basis point to 1.157%.
- West Texas Intermediate crude was little changed at $58.34 a barrel.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.