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Risk rally pauses as markets await signals on trade

Stock Markets Nov 06, 2019 07:25AM ET
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© Reuters. FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain
 
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By Ritvik Carvalho

LONDON (Reuters) - Global stock markets steadied after a three-day rally on Wednesday as traders continued to watch incoming economic data and awaited new developments from U.S.-China trade talks.

MSCI's All Country World Index (MIWD00000PUS) was flat on the day, after rallying 1.3% since Friday.

World stock markets have rallied on a scaling-back of recession bets amid rising optimism about a U.S.-China trade deal this month and as global business surveys indicate tariff-hit manufacturing sentiment has troughed.

France's benchmark 10-year bond yield turned positive on Wednesday for the first time since July, in a further sign that entrenched pessimism in world bond markets is abating.

Investors said stock markets were consolidating gains made over the last three sessions as focus shifted to lingering concerns over the outcome of U.S.-China trade talks.

Traders and investors hope a preliminary Sino-U.S. trade pact will roll back at least some of the punitive tariffs that Washington and Beijing have imposed on each other's goods, but it is still uncertain when or where U.S. President Donald Trump will meet Chinese President Xi Jinping to sign the agreement.

Some suggested markets had already discounted a lot of good news.

"Optimism about a trade deal between the U.S. and China has given a lift to global equities," wrote Simona Gambrani at Capital Economics in a note to clients.

"But with a lot of good news already discounted and global economic growth likely to remain sluggish, we suspect that any further upside for stock prices will be limited."

European stocks edged higher, boosted by gains in financial stocks as investors assessed a mixed bag of earnings reports. The pan-European STOXX 600 index (STOXX) was higher by 0.1%. Britain's FTSE 100 (FTSE) index was flat, while Germany's DAX (GDAXI) and France's CAC 40 (FCHI) were up 0.2% and 0.3% each.

Incoming economic data continued to show signs of improvement.

German industrial orders rose more than expected in September, offering some hope for manufacturers in Europe's biggest economy as they head into the fourth quarter after a tough spell.

Euro zone business activity expanded slightly faster than expected last month but remained close to stagnation, according to a survey whose forward-looking indicators suggest what little growth there is could dissipate.

For an interactive version of the below chart, click here https://tmsnrt.rs/2qwDqWz.

Earlier in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) eased 0.2%. Australian shares (AXJO) were down 0.55%, Chinese stocks (CSI300) fell 0.45% and Japan's Nikkei stock index (N225) gained 0.2%.

In currencies, the dollar dipped against a basket of currencies, down 0.2%. (DXY) The euro was higher by 0.1% at $1.1088. (EUR=)

U.S. stock futures traded flat. (ESc1)

In an outcome that could offer clues as to how next year's U.S. presidential election may unfold, U.S. Democrats claimed an upset win in Kentucky on Tuesday and seized control of the state legislature in Virginia.

The pound traded flat at $1.2884.

A survey showed small British manufacturing firms are at their most pessimistic since just after the Brexit referendum in 2016 as they face political uncertainty at home and trade wars abroad.

Oil prices fell, pulled down by a larger-than-expected build in U.S. crude stocks, after gaining for three sessions on expectations of an easing in U.S.-China trade tensions. U.S. crude (CLc1) fell 0.17% to $57.13 per barrel and Brent crude (LCOc1) fell 0.44% to $62.68 per barrel.

Risk rally pauses as markets await signals on trade
 

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Comments (5)
Nov 06, 2019 5:38AM ET
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paused look @ dax & cac full manipulated socgen had bad earnings but up 3%
Marius Van der Merwe
Marius Van der Merwe Nov 06, 2019 4:08AM ET
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What trade war ?? Started with Trump adding tariffs on China which will be scrapped now and rolled back according to WSJ  .... Trump wanted China to change IP laws and change the state benefits  , which China have been not even considered for a second  ....... Trump wanted China to buy at least $50 billion worth of USA agricultural goods ... how much of that has happened ... and with all of that NOT HAPPENING , they are going to sign a deal / truce to where they all started off from ?????  But al least Trump occupied an idiotic USA media for 18 months while pocketing billions for himself ... so in that aspect he has personally won , but signing a "deal" , even on USA soil will just make him look like a soft bellied politician who caved in under real pressure  ... a coward who used this just as a bail out when his back is against the wall ... I bet the impeachment and signing of the deal will be very close together on the calendar
Marius Van der Merwe
Marius Van der Merwe Nov 06, 2019 2:26AM ET
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Elon Musk gets charged over a tweet by the SEC over his company's finances .... how in the *******is DOnald Trump not charged for manipulating an entire country ( dare I say entire globe's ) economy ??? When this bubble in the S&P , Nasdaq etc is going to burst  , and he already knows when !! , Trump is going to make billions in that crash / pull back  , blame someone else , use his twitter to build those equities up again  ( taking the credit for himself then ) and make billions more ... Using / abusing your position as POTUS for self gain ... is that not what this about with the same boring reported rehashed stories tie and time again ?
eddie glass
eddie glass Nov 06, 2019 2:26AM ET
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the same reason you are allowed to come online and make unsubstantiated accusations and slander against the president of the united states without repercussions
Shram Kaan
Shram Kaan Nov 06, 2019 2:26AM ET
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U r absolutly right Marius 100%
Old Stone
Old Stone Nov 05, 2019 11:44PM ET
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How many times is this story going to be repeated? What was a complete deal or no deal, is now a deal in phases that can't even be closed.
Bob Flippa
Bob Flippa Nov 05, 2019 9:55PM ET
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my goodness , wasn't this already priced in 10 times already over the last 6 months, this manipulation is laughable
Abe Lincoln
Abe Lincoln Nov 05, 2019 9:55PM ET
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Yes, but the market has climbed to new highs again which is ridiculous seeing the entire world is in unending debt up to their eyeballs and bankrupt
 
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