Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Opening Bell: Global Stocks Caught Between Fed Hopes And Trade Ambiguity

By (Pinchas Cohen/ OverviewMar 20, 2019 06:00AM ET
Opening Bell: Global Stocks Caught Between Fed Hopes And Trade Ambiguity
By (Pinchas Cohen/   |  Mar 20, 2019 06:00AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
  • U.S. futures waver ahead of Fed's rate, dot-plot announcement
  • Europe dragged lower by Bayer, energy firms setbacks
  • Asian, U.S. indices take a hit from contrasting trade talks reports
  • Iron ore falls ahead on prospect of new Brazilian mine projects

Key Events

Global stocks halted their rally this morning as trade uncertainty retuned to markets after reports of a lack of co-operation by Chinese negotiators. Futures on the S&P 500, Dow and NASDAQ 100 wavered around neutral levels as investors took a cautious stance ahead of today's Fed monetary policy announcement, amid mounting hopes that the central bank's dot plot projections would strengthen the case for a slower path to tightening.

The STOXX Europe 600 opened 0.16% lower and resumed the slide, with miners and oil firms contributing to losses. The stock of German chemical producer Bayer (DE:BAYGN) plunged over 12%, nearly wiping out all of this year’s profits and heading for the biggest drop in 15 years, after the multinational firm suffered a setback in a trial over claims its Roundup weed killer causes cancer.

In the earlier Asian session, equities opened lower after reports that China has been pushing back U.S. demands—including stricter intellectual property rules—in trade negotiations. Stocks fluctuated as investors weighed between trade uncertainties and expectations for an accommodative stance by the Fed. Remarks by U.S. President Donald Trump that “talks with China are going very well” may have eased some concerns.

China’s Shanghai Composite (-0.01%) closed flat, rebounding from a 1.2% drop, after the 50 DMA crossed over the 200 DMA, triggering a golden cross. Hong Kong’s Hang Seng fell 0.49%. The yuan remained relatively steady, weathering the reported U.S. dissatisfaction with China. South Korea’s KOSPI (-0.02%) also came in at neutral levels, and Australia’s S&P/ASX 200 slid 0.32%.

Japan’s Nikkei 225 managed to eke out a 0.2% gain, even after Sony (T:6758) and Nintendo (T:7974) shares tumbled over 3% after Google (NASDAQ:GOOGL) unveiled its new video game streaming platform Stadia. The index's heavyweight Fast Retailing (T:9983) climbed, offsetting losses in gaming shares.

Global Financial Affairs

In yesterday’s U.S. trading session, all major indices closed in the red except the NASDAQ Composite (+0.12%), on the conflicting U.S.-China trade reports.

The S&P 500 ticked 0.1% lower, giving up a 0.28% higher open and a 0.7% intraday high. Losses in Utilities (-1.14%) and Financials (-0.78%) offset gains in Healthcare (+0.79%) and Consumer Discretionary (+0.5%). Technically, the pushback came within 1% above the October-November peaks, as the 50 DMA approaches the 200 DMA.

The Dow Jones Industrial Average slipped 0.1%. Technically, the price found resistance by the February peak, as the 50 DMA attempts to scale above the 200 DMA.

The Russell 2000 dropped 0.65%, outperforming the other majors. Here we have another example of the trade-proxy breakdown. Non-export reliant small caps should have outperformed, given the latest trade uncertainty. We have been studying and reporting this pattern breakdown in the last couple of months, finding in the correlation between inflation, the dollar and companies' capitalization size a possible alternative driver. Yesterday, the USD fell to the lowest level of the month on speculation of a dovish fed—a tailwind for multinationals, which would attract more demand at the expense of domestic firms.

UST 10-Year Daily Chart
UST 10-Year Daily Chart

Meanwhile, yields on 10-year Treasurys fell today after a three-day advance, supporting the outlook for lower rates on the horizon, which would make current bonds more attractive. Technically, yields are developing a pennant continuation pattern—something to be expected they completed a symmetrical triangle, which itself followed the violation of the long-term uptrend line since July 2016.

DXY Daily Chart
DXY Daily Chart

Technically, however, we have been pointing out for some time that the 1.3% drop since March 7 should be viewed in the prism of a correction within an uptrend, with the 200 DMA drawing an organic uptrend line, as well as ascending channel bottom. The RSI confirms that momentum supports the price movement, also suggesting that the dollar will continue to climb. If not from the outlook for higher rates, the greenback is likely benefiting to its safe-haven status.

Sterling dropped, perhaps signaling pessimism over Prime Minister Theresa May's quest for an extension on the Brexit deadline that could enable her to strike a final deal with parliament.

The euro held steady even after German produce inflation disappointed on inflation.

XAU Daily Chart
XAU Daily Chart

Gold futures fell today, ending a three-day straight advance and wiping out yesterday’s gain. Technically, the precious metal fell below the 50 DMA, as it forms the right shoulder of a H&S top.

Iron ore dropped after a Brazilian ruling that will allow Vale (NYSE:VALE to restart a major mining project.

Up Ahead

  • The Fed is expected to hold interest rates steady on Wednesday. It is also expected to announce it will stop rolling off assets from its balance sheet, and to lower projections for the number of rate hikes for the year.
  • Central banks in U.K., Thailand, the Philippines and Indonesia are all scheduled for policy meetings this week.
  • In the euro zone, PMI numbers out on Friday will give an indication on the health of the region’s industrial and service sectors at the end of the first quarter.


  • Micron Technology (NASDAQ:MU) is slated to announce earnings after market close on Wednesday. Analysts see a $1.66 earnings with a $5.86 billion revenue.
  • Nike (NYSE:NKE) is due to report earnings after market close on Thursday. Analysts forecast a $0.64 EPS on a $9.58 billion revenue, expecting the release to confirm the company's growth momentum remains on an upward trajectory.
  • Tiffany & Co (NYSE:TIF) is expected to release earnings before market open on Friday, with a $1.6 EPS and $1.34 billion forecast.

Market Moves



  • The Dollar Index advanced 0.16 %, where it’s trading at the height of the session.
  • The euro gave up less than 0.05 % to $1.135.
  • The Japanese yen slid 0.2 % to 111.56 per dollar.
  • The MSCI Emerging Markets Currency Index gained less than 0.05 % to the highest in three weeks.
  • The Australian dollar dropped less than 0.05 % to 0.709 per dollar.


  • The yield on 10-year Treasurys fell one basis point to 2.60 %.
  • Germany’s 10-year yield increased less than one basis point to 0.10 %, the highest in two weeks.
  • Britain’s 10-year yield decreased less than one basis point to 1.184 %, the lowest in more than a week.
  • The spread of Italy’s 10-year bonds over Germany’s declined less than one basis point to 2.394 %age points.


Opening Bell: Global Stocks Caught Between Fed Hopes And Trade Ambiguity

Related Articles

Opening Bell: Global Stocks Caught Between Fed Hopes And Trade Ambiguity

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Mohsin Rizvi
Mohsin Rizvi Mar 20, 2019 8:03AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Sell or buy today?
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email