Yahoo Finance Trade Hope Nearing A Peak, Italy Will Cut Its Forecast, Markets Waiting For News
The U.S. Equities Markets Are Flat In Early Trading
The U.S. futures are indicating a flat to a slightly positive open on Thursday morning. The sentiment is buoyed by trade hopes and news President Trump would meet with Liu He later today. The meeting is a sign the talks are nearing their end. Economic adviser Larry Kudlow says the two sides have made significant progress on key issues. The movement comes after China offered substantial concessions and acknowledged U.S. complaints regarding intellectual property, forced technology transfers, and hacking.
Rates on the 10-year treasury continue to advance after hitting a multi-year low. The rate is now above 2.50% and has increased the spread between the 3-month bill and the 10-year note. In economic news, the initial jobless claims fell more than expected and hit a new long-term low. The data underscores strength in the labor economy despite yesterday’s weaker than expected ADP report. Traders will now turn their eyes to tomorrow’s NFP report. Important data within the report includes the unemployment rate, the participation rate, and hourly earnings.
Tesla was among this morning’s worst performers. The stock fell more than -10% after the company reported it missed 1st quarter deliveries by a substantial margin. The news points to a slow down in revenue and weaker than expected earnings for a company struggling on every front.
Brexit, Italy, Downgrades, Oh My!
In the EU Brexit drama, an expected downgrade from Italy, and a downgrade of a leading retailer have markets mixed. In Brexit news, the UK Parliament has voted to force May to ask for another delay to the deadline. The first delay, grudgingly given by the EU, is nearly over. Word out of Italy is that the government and central bank will be downgrading their growth estimates. The downgrade is expected to be 0.1% from 1.0% and is not good. Italy fought tooth and nail to pass a spending bill to boost economic growth and the effort appears to have failed.
In stock news, shares of Casino Guichard fell another -4.0% in today’s action. The company, a supermarket retailer, received its second downgrade in two days. Both Moody’s and Morgan Stanley have downgraded the stock to a sell. Germany’s Commerzbank jumped 3% on word it would receive a rival offer should its proposed merger with Deutsche Bank falls apart. The DAX is the only index to post gains in midday trading, about 0.40%, while the FTSE And CAC were both down -0.50% and -0.30% respectively.
Asia Mixed, Traders Waiting, Japan Display Leads
Asian markets were wildly mixed in Thursday trading. The Shanghai Composite advanced nearly 1.0% while the Australian ASX fell about -0.80%. The other major indices closed with small gains or losses all less than 0.20%. Today’s trading was driven by news on trade but news that as yet does not indicate a deal is done. The good news is that China has admitted U.S. gripes are legitimate, a development that opens the doors to a mutual agreement. Japan Display was by far the best performer after word it would supply LED displays for Apple’s Watch.
This article was originally posted on FX Empire
