The Breakfast Briefing: Global Stocks Slide As Trade Tensions Loom

Ted

FYI: European and Asian stocks fell Thursday as China hardened its line going into trade talks set to start later in Washington.

Shares across Asia fell with Chinese A-shares down 1.5% in Shanghai, the Hang Seng in Hong Kong 2.4% lower and Korean stocks down 3%. The Stoxx Europe 600 was 0.7% lower in early trade, while the FTSE 100 in London was down 0.5%.

U.S. stocks were priced to open lower on Thursday with futures on both the S&P 500 and Dow Jones Industrial Average down about 0.8%. The broad index was down 0.2% at the close on Wednesday, having been up as much as 0.5% earlier in the day.

Morgan Stanley thinks tariffs will be implemented by the end of the week but that they will prove to be temporary. However, Mr. Secker said it’s hard to be sure of any of this.

The Chinese currency fell to its weakest level since early January, hitting 6.84 yuan to the dollar in offshore futures markets. The dollar was also weaker against a broad basket of currencies with the WSJ Dollar Index down 0.04%.

More broadly, banks were among the biggest losers in European stock markets as falling government bond yields signaled ongoing pressure on profitability. Smaller regional names like Commerzbank in Germany, down nearly 3%, and Italy’s Banco BPM , down 6.5%, were worst hit, while Deutsche Bank slipped 1.4% to €6.94, which isn’t far above its record low closing price of €6.75 in late December last year.

The German 10-year bund yield fell to -0.059%, the most deeply negative it has been since late March, while the 10-year U.S. Treasury yield was down to 2.452% from 2.470% Wednesday. Investors seeking safety pushed up prices, which causes yields to fall.
Regards,
Ted
MarketWatch:
https://www.marketwatch.com/story/us-stock-futures-fall-after-trump-claims-china-broke-the-deal-2019-05-09/print

WSJ:
https://www.wsj.com/articles/global-stocks-fall-as-china-holds-firm-in-trade-talks-11557390260

Bloomberg:
https://www.bloomberg.com/news/articles/2019-05-08/asian-stocks-face-mixed-start-amid-trade-concern-markets-wrap?srnd=premium

IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-stock-market-rally-china-trade-news-disney-roku-etsy/

Reuters:
https://www.reuters.com/article/us-global-markets/shares-sink-as-u-s-china-trade-talks-go-to-the-wire-idUSKCN1SF04P

CNBC:
https://www.cnbc.com/2019/05/09/stock-market-us-china-trade-tensions-continue.html

U.K.:
https://uk.reuters.com/article/uk-britain-stocks/u-s-china-trade-tensions-haunt-londons-ftse-100-idUKKCN1SF0O7

Europe:
https://www.reuters.com/article/us-europe-stocks/european-shares-sink-on-fears-of-renewed-u-s-china-trade-war-idUSKCN1SF0NF

Asia:
https://www.marketwatch.com/story/asian-stocks-fall-on-trade-fears-as-trump-says-china-broke-the-deal-2019-05-08/print

Bonds:
https://www.cnbc.com/2019/05/09/us-bonds-investors-monitor-us-china-trade.html

Currencies:
https://www.cnbc.com/2019/05/09/forex-market-us-china-trade-talks-tariff-threats-in-focus.html

Oil:
https://www.cnbc.com/2019/05/09/oil-market-us-china-trade-war-us-crude-stockpiles-in-focus.html

Gold:
https://www.cnbc.com/2019/05/09/gold-market-us-china-trade-war-iran-sanctions-in-focus.html

Cuirrent Futures:
https://finviz.com/futures.ashx