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Markets Mixed, Conflicting Trade Signals Confuse Traders, No Deal Expected In 2019

Thomas Hughes

The U.S. Futures Are Mixed In Early Trading

The U.S. index futures had been indicating a lower open for the equities market until new information on trade emerged. Sources say Chines Vice Premier Liu He is cautiously optimistic a trade deal can be struck. He also reportedly invited U.S. negotiators back to Beijing for another round of talks. Despite this, there is little expectation a deal will be struck in 2019. There is less than a month to go until the December 15th tariff deadline and it is unlikely the current impasse will be resolved by then.

Additionally, both houses of the U.S. Congress have passed a bill in support of Hong Kong’s protestors. The bill is on its way to the White House now and puts Trump in a tight spot. China has been fiercely vocal about U.S. support for Hong Kong. Chinese officials view the bill as an outsider meddling in internal affairs. The Dow Jones Industrial Average, S&P 500, and NASDAQ Composite are all up about 0.15% in premarket trading.

In stock news, shares of Macy’s are leading the retail sector lower after reporting earnings. The company beat EPS but missed on revenue and lowered its outlook for 2020 Shares of the stock are down -4.5% on the news. In economic news, jobless claims were unchanged over the last week and trending near historic lows. The Philly Fed’s MBOS rose five points over the last month to 10.4 indicating accelerating expansion with the U.S economy. The labor component of the index fell -11 but remains strongly positive and above 20.

EU Markets Are Down on Trade

The EU indices are mostly lower at midday on Thursday. The UK FTSE 100 is in the lead with a loss of -0.70% while the DAX and CAC are trading closer to break-even. Mixed trade signals are at the root of today’s decline. With the Phase One trade deal in question, it is unlikely the EU will see a significant increase in economic activity any time soon. Basic Resources are leading the market lower with a loss of -1.5%. Autos are in the lead and up 0.4%. In stock news, shares of ThyssenKrupp are down -11% after reporting a larger loss than expected and lowering full-year guidance.

Asian Markets Move Lower, No Trade Deal In Sight

Asian markets moved lower on Thursday due to a growing certainty there will be no Phase One trade deal this year. The Hong Kong Hang Seng led the rout with a loss of -1.57%, the Korean Kospi is a close second. In Korea, shares of Samsung and SK Hynix are both down about -2.0%. The Japanese Nikkie, Australian ASX and Shanghai Composite also ended the day lower but losses were less severe.

This article was originally posted on FX Empire