Trade Driven Gains Fade, Global Markets Mixed, Trade War Escalates

The U.S. Futures Are Lower As Trade Driven Gains Fade

The U.S. futures are pointing to a solidly lower open following Tuesday’s rally. the rally was driven by trade hopes fueled by the U.S. treatment of Huawei. Huawei will be allowed to purchase some equipment from the U.S. for a limited time in order to maintain its network and service its customers. While good news the relaxed restrictions do little to end the trade war. The tech-heavy NASDAQ Composite was in the lead in early pre-market trading, down about -0.55%. The Dow Jones Industrials and S&P 500 were both indicated to open with losses near -0.35%.

Negative sentiment was compounded by a ruling from a Federal anti-trust court. The court upheld a ruling against Qualcomm and added another twist to the 5G story. Qualcomm is accused of suppressing its competition and artificially inflating prices for its chips. The combination of news had the entire tech sector moving lower with chips down more than -1.5%.

In earnings news, the retail sector was moving lower after a series of bad reports. Reports from Lowes and Nordstrom’s both fell hard after delivering weaker than expected revenue and guidance. Shares of Lowe’s fell more than -8.0% while Nordstrom’s was down more than -11.0%. Conversely, shares of Target saw big gains in the early pre-market session. The company reported better than expected revenue, earnings and comp store sales.

European Markets Mixed, Geopolitics Weighs On Outlook

The European markets were mixed in early Wednesday trading. The DAX and CAC were both down about -0.30% while the UK FTSE was up 0.12% at midday. The moves come as global trade tensions escalate and the U.S./China trade war morphs into a tech war. The restrictions on Huawei and other Chinese companies set the two nations up in a battle over 5G. Which will win is yet to be seen.

In stock news, the insurance sector was down the hardest. The sector shed more than -0.60% on fears of economic slowing. Oddly enough, the tech sector was among the strongest performers in the EU, up about 0.70%. Shares of retailer Marks & Spencer fell more than -4.5% after it issued weaker than expected revenue and earnings. The IG Group, the operator of FX and CFD trading exchanges, issued weak guidance but its shares surged. The move was driven by a plan to boost growth that was well received by investors.

Asian Mixed, Trade War Escalates

Asian shares were mixed as trader ponder the impact of this week’s trade war escalation. Both sides seem intent on standing their ground and even attacking the other. Shares of HikVision, a Chinese surveillance tech company, fell -5.5% as it comes into the eyesights of U.S. regulators. The Chinese Shanghai Composite was the only index to move lower and it shed -0.49%. The Hong Kong Hang Seng was the biggest gainer but it only advanced 0.18%. The Nikkei and ASX were both up about 0.10%.

This article was originally posted on FX Empire

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