The Breakfast Briefing: U.S. & Global Stocks Dip With Central Banks in Focus

Ted

FYI: U.S. stocks were set to open slightly lower Tuesday morning.

At around 3:00 a.m. ET, Dow futures fell 32 points, indicating a negative open of more than 34 points. Futures on the S&P and Nasdaq were both also marginally lower.

The Dow posted its fourth straight day of gains Monday, on the back of renewed optimism in U.S.-China trade talks. The U.S. Treasury Secretary, Steven Mnuchin, said that there is a “conceptual agreement” around intellectual property theft with China.

• Gold prices drop

• European stocks down, Asia mixed

Global stocks slipped as investors moderated their expectations about how much central banks are likely to cut interest rates in the coming days.

European stocks ticked down, with the Stoxx Europe 600 falling 0.6% in opening trade, with losses across most regional indexes. The German DAX fell 0.3% and France’s CAC 40 fell 0.5%.

Asian markets were muted Tuesday, with the Shanghai Composite down 0.1% and Japan’s Nikkei 225 up 0.4%. Hong Kong’s Hang Seng was flat.

Analysts expect the European Central Bank will cut 10 basis points from benchmark interest rates when it meets on Thursday. The Federal Reserve will meet next week, and is broadly expected to lower rates by 25 basis points.

As of mid-September, the market had been pricing in a 20-basis-points cut, as well as renewed quantitative easing, said Gareth Isaac, chief investment officer for EMEA fixed income at Invesco. But the eurozone’s economy isn’t in too bad a shape, he said, which may temper the amount or timing of QE that some on the ECB board will tolerate.

The yield on the 10-year Treasury edged down slightly to 1.625% Tuesday, from 1.632% Monday. In European bonds, the yield on the 10-year German bund rose to minus 0.579% from minus 0.585% Tuesday.

In commodities, Brent crude oil was up 0.2% at $62.75 a barrel. Oil investors were eyeing a possible initial public offering by Saudi Arabia’s state-run oil company Aramco, known officially as Saudi Arabian Oil Co. Aramco’s chief executive on Tuesday said the company is ready for a listing whenever shareholders decide.

Traditional haven metal gold fell 0.5%.

Later today, the U.S. Labor Department will release its July report on job openings and labor turnover. In June, there were 7.35 million unfilled jobs. Should that number remain high, it would indicate that the recent hiring slowdown is more a result of worker scarcity than companies being cautious.

Regards,
Ted

WSJ:
https://www.wsj.com/articles/global-stocks-dip-with-central-banks-in-focus-11568102593

Bloomberg:
https://www.bloomberg.com/news/articles/2019-09-09/asia-stocks-seen-mixed-sovereign-yields-climb-markets-wrap?srnd=premium

IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-apple-iphone-zscaler-stock-market-rally/

CNBC::
https://www.cnbc.com/2019/09/10/dow-futures-trade-lower-ahead-of-new-us-jobs-data-and-apple-event.html

Reuters:
https://uk.reuters.com/article/us-usa-sec-bestinterest/seven-u-s-states-district-of-columbia-sue-to-block-sec-rule-change-idUKKCN1VV04T

U.K.
https://uk.reuters.com/article/uk-britain-stocks/steady-pound-growth-worries-pressure-ftse-100-galliford-jumps-idUKKCN1VV0N9

Europe:
https://www.reuters.com/article/us-europe-stocks/european-shares-open-lower-ftse-leads-losses-idUSKCN1VV0MS

Asia:
https://www.marketwatch.com/story/asian-markets-mixed-as-investors-digest-economic-data-ahead-of-central-bank-meetings-2019-09-09/print

Bonds:
https://www.cnbc.com/2019/09/09/us-treasury-yields-higher-ahead-of-new-data.html

Currencies:
https://www.cnbc.com/2019/09/10/forex-markets-us-china-trade-war-in-focus.html

Oil:
https://www.cnbc.com/2019/09/10/oil-markets-opec-saudi-arabia-in-focus.html

Gold:
https://www.cnbc.com/2019/09/09/gold-markets-monetary-policy-in-focus.html

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