Market Brief Traders Ratchet Down Expectations for USChina Trade Talks
See a summary of the top market themes and trends from today's US trading session!
Share this:
- Traders are downbeat heading into this week’s US-China trade talks in Washington DC after last night’s announcement that the Trump Administration would be blacklisting eight Chinese technology giants, today’s rumors that US government pensions would curtail investments in Chinese stocks, and the announcement of visa bans on Chinese officials from the Xinjiang province. At a minimum, traders will be looking for another delay to the next round of tariff escalation to declare the talks a success.
- FX: The British pound was the weakest major currency as Boris Johnson’s Brexit proposal looks increasingly unlikely to garner approval from the European Union. Speaking of Europe, the euro was the second-weakest major currency today, with a German official stating there is no need for a fiscal stimulus package. There was a three-way tie for the strongest major currency between the New Zealand dollar, Swiss franc, and Japanese yen.
- US data: PPI (Sept) printed at -0.3% m/m, well below the +0.1% reading expected. Core PPI also missed at -0.3% m/m vs. +0.2% eyed. A weak CPI report later this week could help cement the case for an interest rate cut from the Federal Reserve at the end of the month.
- Commodities: Gold edged higher on the day while oil ticked lower after the EIA cuts its forecast for 2020 world oil demand.
- US indices closed more than -1% lower across the board on US-China concerns. See what we'll be watching in the upcoming earnings season!
- All eleven sectors fell on the day, led lower by Financials (XLF). REITs (XLRE) fell the least on the day.
- Stocks on the move:
- Domino’s Pizza (DPZ) gained 5% after the company announced a $1B buyback program, despite cutting its outlook for the next three years.
- Chinese company stocks like Alibaba (BABA, -4%), JD.com (JD, -4%) and Baidu (BIDU, -2%) all slide on reports that the White House was considering limits on Chinese stock holdings in government pension funds.
- Big US banks like Bank of America (BAC, -2%) and JP Morgan Chase (JPM, -2%) slid amidst a drop in Treasury yields.
- Traders are downbeat heading into this week’s US-China trade talks in Washington DC after last night’s announcement that the Trump Administration would be blacklisting eight Chinese technology giants, today’s rumors that US government pensions would curtail investments in Chinese stocks, and the announcement of visa bans on Chinese officials from the Xinjiang province. At a minimum, traders will be looking for another delay to the next round of tariff escalation to declare the talks a success.
- FX: The British pound was the weakest major currency as Boris Johnson’s Brexit proposal looks increasingly unlikely to garner approval from the European Union. Speaking of Europe, the euro was the second-weakest major currency today, with a German official stating there is no need for a fiscal stimulus package. There was a three-way tie for the strongest major currency between the New Zealand dollar, Swiss franc, and Japanese yen.
- US data: PPI (Sept) printed at -0.3% m/m, well below the +0.1% reading expected. Core PPI also missed at -0.3% m/m vs. +0.2% eyed. A weak CPI report later this week could help cement the case for an interest rate cut from the Federal Reserve at the end of the month.
- Commodities: Gold edged higher on the day while oil ticked lower after the EIA cuts its forecast for 2020 world oil demand.
- US indices closed more than -1% lower across the board on US-China concerns.
- All eleven sectors fell on the day, led lower by Financials (XLF). REITs (XLRE) fell the least on the day.
- Stocks on the move:
- Domino’s Pizza (DPZ) gained 5% after the company announced a $1B buyback program, despite cutting its outlook for the next three years.
- Chinese company stocks like Alibaba (BABA, -4%), JD.com (JD, -4%) and Baidu (BIDU, -2%) all slide on reports that the White House was considering limits on Chinese stock holdings in government pension funds.
- Big US banks like Bank of America (BAC, -2%) and JP Morgan Chase (JPM, -2%) slid amidst a drop in Treasury yields.
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Dow Jones forecast: Stock markets under pressure from multiple sources
When looking at the major tech-heavy US indices like the S&P 500 or the Nasdaq 100, you wouldn’t think that the stock market is particularly weak. Yet, beneath the surface, the market is far from healthy right now. Investors are evidently just piling into the big tech and AI names, and as a result, market breadth is deteriorating. Other indices like the small cap Russell 2000 and the Dow Jones are starting to reflect that weakness.
Nikkei breakout accelerates as yen weakness returns
Nikkei has started October with a powerful breakout, helped by renewed yen weakness and strong upside momentum
AUD/USD hammered by US yields and fading RBA hike bets
US yields, dollar strength and fading RBA hike bets have combined to drive AUD/USD to fresh multi-month lows. The macro and technical bias remains bearish, although history suggests parts of the move are now reaching unusually stretched levels.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.