Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Opening Bell: Stocks Drift On Fears Of Trade Tariffs Deadlock; Dollar Drops

By Investing.com (Pinchas Cohen)Market OverviewNov 06, 2019 06:54AM ET
www.investing.com/analysis/opening-bell-stocks-drift-on-fears-of-trade-tariffs-deadlock-dollar-drops-200482729
Opening Bell: Stocks Drift On Fears Of Trade Tariffs Deadlock; Dollar Drops
By Investing.com (Pinchas Cohen)   |  Nov 06, 2019 06:54AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
USD/CNY
-0.13%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ROKU
+0.30%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
9984
-1.46%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
8015
+1.94%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
STOXX
+0.17%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
JP10Y...
-0.63%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

  • U.S. futures subdued on fears of trade deadlock over tariffs cutback
  • European shares drift on Societe Generale , Mark & Spencer profits fall
  • U.S. dollar retreats, flat at late July levels

Key Events

European shares and futures on the S&P 500, Dow and NASDAQ 100 drifted on fears of possible complications in U.S.-China trade negotiations, while bullish numbers for the U.S. service sector trimmed expectations of further Fed accommodation.

In particular, U.S. contracts were traded in a narrow range, after closing near Monday’s record highs yesterday.

The STOXX 600 returned toward the earlier lower opening after rebounding to the highest level since mid July 2015. Societe Generale (PA:SOGN) and Marks and Spencer (LON:MKS) posted a profits flop, eclipsing positive corporate results from Adidas (DE:ADSGN) and BMW (DE:BMWG).

Meanwhile, upbeat German factory orders only mildly boosted the euro, as eurozone manufacturing activity picked up slightly in October but remained near its weakest level in seven years.

In the earlier Asian session, regional equities ended mixed after Beijing was reported to be pressing for Washington to roll back tariffs before any progress on the deal could be made. Chinese officials are allegedly asking for 15% duties imposed on $125 billion of domestic goods in September to be cancelled as part of the so-called "Phase One" deal. The lack of any meaningful response by the U.S. side spurred fears of a new breakdown of negotiations.

Japan’s Nikkei 225 (+0.22%) nonetheless managed to cling onto persisting trade hopes, outperforming its peers and hitting a fresh 13-month high, also helped by a weaker yen and rising bond yields, which buoyed exporters and financials shares.

The 10-year yield climbed to its highest level in more than five months as an auction was met with weaker-than-expected demand amid a global debt sell-off. Technically, the yen is struggling with the 200 DMA, as it attempts to resume its rebound since August against the long-term downtrend.

Australia’s S&P/ASX 200 (-0.55%) underperformed.

Global Financial Affairs

Yesterday, U.S. stocks ended slightly off their record highs, while the market evaluated corporate profits and the broader economic outlook, with the elusive U.S.-China trade deal looming large in the background.

S&P 500 Daily Chart
S&P 500 Daily Chart

On the S&P 500 chart, the red candle posted yesterday, coming after Monday’s doji on a gap, could—although small—be the prelude for an Island Reversal, as it may prove to be an Exhaustion Gap: it may be the third one of this rally, since the Oct. 3 bottom.

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

Meanwhile, yields on 10-year Treasurys paused their ascent after a three-day climb. News that U.S. non-manufacturing sectors expanded more than forecast in October triggered a brief equity rally but dimmed hopes for a December rate cut from the Federal Reserve. Technically, yields are struggling against a confluence of the top of a symmetrical triangle and the downtrend line since November 2018.

DXY Daily Chart
DXY Daily Chart

The dollar retreated after strengthening for the second day on Tuesday, after reaching the highest price since it fell below its long-term uptrend line since February 2018. The price has remained flat since the Fed inaugurated its path to lower interest rates with a first rate cut on July 31, when the price was 98.06.

The yuan traded above the 7.000 mark for a second day.

Oil retreated after failing to cross above the 200 DMA for two days in a row. As for other instruments, a stronger direction for WTI prices continues to hinge on trade progress.

Up ahead

Market Moves

Stocks

  • The Stoxx Europe 600 Index declined.
  • Futures on the S&P 500 Index was little changed.
  • The U.K.’s FTSE 100 Index fell 0.1%.
  • The MSCI All-Country World Index was little changed.
  • The MSCI Emerging Market Index sank 0.2%.
  • Currencies

  • The Dollar Spot Index declined 0.15%.
  • The euro was steady at $1.1079.
  • The British pound was little changed at $1.2883.
  • The Japanese yen strengthened 0.1% to 109.01 per dollar.
  • Bonds

  • The yield on 10-year Treasuries decreased less than one basis point to 1.86%.
  • The yield on two-year Treasuries dipped less than one basis point to 1.62%.
  • Britain’s 10-year yield gained less than one basis point to 0.779%.
  • Germany’s 10-year yield rose one basis point to -0.30%.
  • Japan’s 10-year yield jumped four basis points to -0.079%.
  • Commodities

  • West Texas Intermediate crude declined 0.5% to $56.92 a barrel.
  • Gold climbed 0.1% to $1,484.38 an ounce.
  • The Bloomberg Commodity Index dipped 0.2%.
  • Opening Bell: Stocks Drift On Fears Of Trade Tariffs Deadlock; Dollar Drops
     

    Related Articles

    Opening Bell: Stocks Drift On Fears Of Trade Tariffs Deadlock; Dollar Drops

    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.
    • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

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

    Write your thoughts here
     
    Are you sure you want to delete this chart?
     
    Post
    Post also to:
     
    Replace the attached chart with a new chart ?
    1000
    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 (2)
    Yewa Ibrahim
    Yewa Ibrahim Feb 04, 2021 2:23PM ET
    Saved. See Saved Items.
    This comment has already been saved in your Saved Items
    Rui Val
    Rui Val Nov 08, 2019 7:02AM ET
    Saved. See Saved Items.
    This comment has already been saved in your Saved Items
    These markets are attracting normal people to put savings in it and big investors are taking their money out of the markets. Markets will go down soon. Please be smart and take your money out.
     
    Are you sure you want to delete this chart?
     
    Post
     
    Replace the attached chart with a new chart ?
    1000
    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 Investing.com'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
    or
    Sign up with Email