Global stocks, oil suffer as U.S.-China trade spat heats up

Global stocks slid on Monday and U.S. oil prices slumped after U.S. President Donald Trump announced tariffs on Chinese goods and Beijing responded with similar measures in an escalating trade dispute.

Fears the spat between the world’s two largest economies could intensify added to pressure on oil prices, which extended Friday’s big fall into the start of week, while the dollar retreated from a seven-month high against a basket of currencies.

The MSCI world equity index, which tracks shares in 47 countries, fell 0.3 percent, nearing a seven-day low. Trump announced tariffs on Friday on $50 billion of Chinese imports, including cars, starting on July 6.

China said it would retaliate immediately by slapping duties on American export products, including crude oil, and suspend all previous trade agreements with Trump’s administration.

The exchange of blows between Washington and Beijing has heightened fears of a protracted dispute that could hurt global growth and particularly Europe, given that Trump has signalled he wants to impose tariffs on automotive exports.

Futures on main euro zone benchmarks were trading down 0.2-0.5 percent as investor angst about the outlook for economic growth filtered through to European stocks.

The pan-regional STOXX 600 was on track to relinquish gains recorded on Thursday when a dovish European Central Bank pushed back expectations for an interest rate hike.

Germany’s DAX was down 1.36 percent while France’s CAC 40 declined 1.23 percent.

U.S. light crude oil hit a two-month low of $63.59 a barrel before recovering somewhat to trade at $64.72, down 30 cents, by 1100 GMT.

The producer cartel of the Organisation of the Petroleum Exporting Countries (OPEC), which is de facto led by Saudi Arabia, and some allies including Russia have been restricting output since the start of 2017.

Global stocks rise despite G7 clash; Italy helps euro

European stocks edged higher on Monday, shrugging off the weekend’s fractious G7 meeting as investors looked forward to an event-packed week while receding tensions in Italy nudged the euro towards a recent three-week high.

President Donald Trump’s rejection of a previously signed communique separates the United States from its traditional global economic allies and underlines trade tensions, though markets have taken the news as yet another theatrical gesture by the U.S. administration.

If anything, markets believe the G7 summit might force policymakers to adopt a cautious stance as two of the world’s top central banks - the U.S. Federal Reserve and the European Central Bank - are set to tighten policy this week.

While stocks wobbled and the dollar edged higher in initial reaction to the G7, which Societe Generale termed as a “mess”, markets quickly recouped losses, with stocks firmer across the board on expectations that any withdrawal in policy stimulus would be very gradual on the backdrop of rising trade tensions.

An MSCI index of European stocks was up 0.7 percent in early trading, not far from a recent two-week high.

The S&P 500 futures were 0.1 percent lower after dropping as much as 0.3 percent in early trading, indicating a firm start for Wall Street.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped early but was last up 0.3 percent. Hong Kong’s Hang Seng also gained 0.3 percent while the Shanghai Composite Index fell 0.5 percent.

The Fed is almost certain to raise rates again on Wednesday, inching closer to a neutral policy stance, while the ECB is likely to signal on Thursday that its 2.55 trillion euro bond purchase scheme will end this year, a key move in dismantling crisis-era stimulus.

Global stocks and currencies rebound with risk appetite creeping back

Global Stock Markets

A degree of risk appetite returned to global markets on Tuesday, with developing-nation stocks and currencies rebounding and the euro climbing with Italian bonds. The dollar fell as Treasury yields climbed, and the pound advanced.

U.S. equity futures pointed to a higher open and the Stoxx Europe 600 Index nudged upward after the MSCI Asia Pacific gauge eked out a gain in a mixed session earlier. Emerging stocks were the stand out, ending a three-day losing streak.

The euro swung from a loss to a gain as investors weigh the chances Italy’s president will seek to curtail a potential populist government, while the country’s bonds rebounded from a two-day slide. The Turkish lira fell to yet another record low. Sterling strengthened amid speculation there could be another U.K. election and after upbeat comments from a Bank of England policymaker.

Easing trade tension between the world’s two biggest economies -- China confirmed a cut to the import duty on passenger cars on Tuesday -- has helped restore some confidence in emerging-market assets, though Italy’s political situation continues to loom over global markets. President Sergio Mattarella is reportedly preparing to pick a premier on Wednesday or Thursday. Beyond politics, central banks are in focus this week -- the Federal Reserve will release minutes of its latest policy meeting on Wednesday, while the ECB follows suit on Thursday. A raft of U.S. debt sales adds to the busy agenda.

Elsewhere, the South African rand and Russian ruble headed higher. Hong Kong and South Korean markets were shut for a holiday. Most commodities, including oil, advanced as the greenback weakened.

Stocks

The Stoxx Europe 600 Index rose 0.1 percent as of 12:17 p.m. London time.
Futures on the S&P 500 Index rose 0.2 percent.
The U.K.’s FTSE 100 Index rose 0.2 percent.
Germany’s DAX Index rose 0.4 percent.
The MSCI Emerging Market Index gained 0.5 percent, the largest rise in more than a week.
The MSCI Asia Pacific Index climbed 0.1 percent.

Currencies
The euro increased 0.2 percent to $1.1809, the strongest in a week.
The British pound gained 0.2 percent to $1.3452.
The Japanese yen increased 0.1 percent to 110.98 per
The Turkish lira sank 0.8 percent to 4.6112 per dollar, the weakest on record.

Bonds
The yield on 10-year Treasuries climbed two basis points to 3.08 percent.
Germany’s 10-year yield gained four basis points to 0.56 percent.
Britain’s 10-year yield gained four basis points to 1.518 percent.
Italy’s 10-year yield sank nine basis points to 2.298 percent, the largest tumble in almost seven months.

Commodities
West Texas Intermediate crude increased 0.2 percent to $72.42 a barrel, the highest in more than three years.
Gold rose 0.1 percent to $1,294.36 an ounce.

Dollar and oil stops rollercoasting, bonds and gold stabilizing

Global Stock Markets

Calm returned to world markets on Friday after a rollercoaster week that has seen oil break $80 a barrel, government borrowing costs jump and emerging markets battered by a pumped-up dollar.

 Traders were wondering if it would all flare up again with Italian politics unsettled, the United States and China locked in trade talks and Donald Trump’s decision to dump the Iran nuclear deal still causing fallout.

European stocks were 0.3 percent lower, but with the euro EUR= near a 5-month low following the dollar's surge and oil shares gleeful about its rapid rise, the region was heading for an eighth straight week of gains.

Slowing Japanese core consumer price growth that kept the Bank of Japan's elusive 2 percent target well out of reach saw the dollar hit a four-month high of 111 yen JPY= though it stalled had elsewhere.

Italian government bonds continued their struggles too. They have seen their biggest sell-off in over a year this week over plans being floated by a proposed new anti-establishment coalition government.

One policy includes issuing more short-term debt to pay companies owed money by the state, the economics chief of the one of the coalition parties, the far-right League, said on Friday.

The dollar index against a basket of six major currencies .DXY steadied at 93.471 having risen to a five-month peak of 93.632.

The index has gained about 1 percent this week, buoyed by the surge in U.S. Treasury yields, with the 10-year U.S. Treasury note yield US10YT=RR scoring a seven-year peak of 3.128 percent.

Euro traders nudged the shared currency back above $1.1805 EUR=, but it has fallen nearly 1.2 percent this week, largely pressured by the Italian uncertainty.

It is also heading for its fifth successive weekly drop versus the dollar, which would be a first for the shared currency since 2015.

Elsewhere the two other macro spotlights were the hot oil markets after Brent crude broke up through $80 a barrel on Thursday, and the strain on emerging economy currencies.

The Turkish lira TRYTOM=D3 was holding up a bit better having fallen to a record low this week, the Brazilian real BRL= plumbed a two-year low, while Mexico's peso MXN=D2 has shed more than 5 percent this month.

That latter continues to hit by negotiations to rework the North American Free Trade Agreement (NAFTA), which governs Mexico’s trade with the United States.

A retreat by Indonesia's rupiah IDR= to a 2-1/2-year low prompted the central bank to tighten monetary policy on Thursday for the first time since 2014 to support the currency. It slipped again on Friday.

In commodities, Brent crude oil futures were 16 cents higher at $79.46 a barrel LCOc1 after rising to $80.50 on Thursday, their highest since November 2014.

Brent has risen 3 percent this week and is headed for a sixth week of gains.

A rapid slide in oil supply from Venezuela, concern that U.S. sanctions will disrupt exports from Iran, and falling global inventories have all combined to push oil prices up nearly 20 percent in 2018.

Gold meanwhile has had its worst week since early December, having dropped more than 2 percent.

US Treasurys tick higher after reaching multiyear highs

Global Stock Markets

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 3.0613 percent, while the yield on the 30-year Treasury bond was also lower at 3.1900 percent.

In oil markets, Brent crude traded at around $77.83 a barrel on Wednesday morning, down 0.77 percent, while U.S. crude was around $70.92 a barrel, around 0.5 percent lower.

U.S. government debt prices rose into positive territory on Wednesday, as investors continued to monitor an upswing in bond yields.

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 3.0613 percent, while the yield on the 30-year Treasury bond was also lower at 3.1900 percent.

U.S. government debt prices rose into positive territory on Wednesday, as investors continued to monitor an upswing in bond yields.

The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 3.0613 percent, while the yield on the 30-year Treasury bond was also lower at 3.1900 percent.

Robust retail sales and factory data lifted the U.S. 10-year yield through a psychologically important level to hit 3.095 percent — it's highest since 2011. The rise in yields hampered U.S. share markets amid fears it could undercut stock valuations.

In data, housing starts and industrial production data for April are both scheduled to be released on Wednesday morning.

In oil markets, Brent crude traded at around $77.83 a barrel on Wednesday morning, down 0.77 percent, while U.S. crude was around $70.92 a barrel, around 0.5 percent lower.

Oil markets fell away from multi-year highs on Wednesday, weighed down by ample supplies despite ongoing production cuts by OPEC and looming sanctions against Iran.

US STOCKS-Wall St set to extend recovery as trade war fears cool

Global Stock Markets

 U.S. stocks on Thursday looked set to add to late-session gains from a day earlier as concerns over a trade war between the United States and China eased on signs that the world’s two biggest economies were open to negotiations on tariffs. 

Technology stocks, which have taken a beating in the past three weeks, were higher in premarket trading. Facebook, Amazon, Alphabet, Netflix - collectively known as the “FANG” group - were up between 1.1 percent and 3.8 percent.

The Dow Jones Industrial Average dropped about 500 points on Wednesday after a proposed U.S. tariffs on $50 billion of Chinese goods prompted swift retaliation from Beijing. China hit back with equal measure on U.S. goods such as soybeans, autos, chemicals and some types of aircraft.

Shares of big U.S. manufacturers, grain traders and chipmakers were hit hard until mid-day.

But sentiment reversed after President Donald Trump’s top economic adviser Larry Kudlow said the administration was involved in a “negotiation” with China rather than a trade war.

Also, the effective date of China’s move depended on when the U.S. action took effect, providing room for maneuver.

Economic data on Thursday showed that the U.S. trade deficit increased to a near 9-1/2-year high in February, but the shortfall with China narrowed sharply.

While exports to China were unchanged in February, imports from the country declined 14.7 percent.
At 8:35 a.m. ET, Dow e-minis were up 79 points, or 0.33 percent, with 65,148 contracts changing hands.

S&P 500 e-minis were up 12.75 points, or 0.48 percent, with 224,988 contracts traded.

Nasdaq 100 e-minis were up 50.5 points, or 0.77 percent, on volume of 80,483 contracts.

Facebook shares were up 3.7 percent after Chief Executive Mark Zuckerberg said the company had not seen “any meaningful impact” on usage or ad sales since the scandal.

Wells Fargo rose 1 percent and Citigroup gained 1.5 percent following upgrades by UBS.

Advanced Micro Devices jumped 2.8 percent after Stifel upgraded to “buy”, while Micron Technology fell 1.5 percent after UBS started with a “sell” rating. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

Boeing, Ford lead list of casualties in China-U.S. trade spat

Global Stock Markets

U.S. aerospace companies, automakers, grain merchants and chipmakers were the early casualties on Wednesday after China and the United States announced tariffs on $50 billion of imports, cementing fears they were spiraling towards a trade war. 

The speed with which the trade spat between Washington and Beijing is ratcheting up – the Chinese government took less than 11 hours to respond with its own measures – led to a sharp sell-off in global stock markets and commodities. [MKTS/GLOB]

At 6:22 a.m. ET, Dow e-minis 1YMc1 were down 568 points, S&P 500 e-minis ESc1 fell 48 points and Nasdaq 100 e-minis NQc1 dropped 148.25 points.

The stock futures implied the S&P 500 .SPX would not only open below its 200-day moving average, a key support level, but also challenge its 2018 low from Feb. 9.

The blue-chip Dow Jones Industrial Average .DJI and the tech-heavy Nasdaq Composite .IXIC would come close to their 200-day marks.

China levied 25 percent additional tariffs on U.S. goods, but unlike Washington’s list that covers many obscure industrial items, Beijing’s covers 106 key U.S. imports including soybeans, planes, cars, whiskey and chemicals.

As has been the case since the trade war fears surfaced, industrials were the worst hit.
Shares of Boeing (BA.N), whose older 737 narrowbody jet would likely be covered by China’s list, tumbled about 6 percent in premarket trading. Caterpillar (CAT.N) fell 4.5 percent.

Automakers Ford (FORD.O), General Motors (GM.N) and Fiat Chrysler (FCAU.N) fell between 3.5 percent and 4 percent. Tesla (TSLA.O) was down 4.7 percent, following a near 6 percent gain on Tuesday after saying it need not raise more capital as its Model 3 output increases.

Grain merchant Archer Daniels (ADM.N) was down 3.3 percent, while Bunge (BG.N) slipped 2.7 percent.

White House unveils tariffs aimed at China's tech goods

The malaise was broad based. Twenty-four of the 30 Dow components were trading premarket, with all of them in the red. About 185 of the S&P 500 .SPX components were trading premarket, with only nine of them flat to slightly higher.

Among them was Lennar (LEN.N), which gained 2.2 percent after the homebuilder reported a higher quarterly profit as it sold more homes at higher prices.

Investors headed for safer bets, sending gold prices nearly 1 percent higher. U.S. 10-year Treasury yield US10YT=RR was last down 2.5 basis points at 2.76 percent.

Economic data due includes the ADP National Employment Report that is expected to show U.S. private employers added 205,000 jobs in March, compared to 235,000 jobs in February. That comes ahead of the more comprehensive March payrolls data on Friday.

Wall Street higher as tech, consumer discretionary recover

Global Stock Markets

Wall Street’s main indexes were higher on Tuesday, with the Dow Jones Industrial Average rising more than 100 points, helped by a recovery in the battered technology and consumer discretionary stocks. 

Amazon and Tesla, the top drags on Monday, rose, with the Dow and the S&P opening above their 200-day moving averages.

The S&P 500 on Monday broke below that important level for the first time since Britain’s vote to leave the European Union in June 2016.

At 9:34 a.m. ET, the Dow was up 0.4 percent at 23,738.31.

The S&P 500 rose 0.37 percent to 2,591.43 and the Nasdaq Composite gained 0.57 percent to 6,909.08.
Amazon.com rose nearly 2 percent, after closing down more than 5 percent on Monday after President Donald Trump’s latest attack on the online retailer.

Tesla shares gained 2.6 percent after the electric automaker said it need not raise more capital this year while announcing it built 2,020 of its cheaper Model 3 sedans in the last seven days of March.

Investors have also been wary about a trade war after China decided to impose extra tariffs on 128 U.S. products over the weekend, in retaliation to Trump’s decision to impose tariffs on steel and aluminum.

The Trump administration is expected sometime this week to publish a list of Chinese goods that could be subjected to new U.S. tariffs.

Nine of the 11 major S&P sectors were higher, led by a 0.75 percent gain in the consumer discretionary index.

Investors will be able to buy and sell shares in the Swedish music streaming service Spotify in the New York Stock Exchange’s first-ever direct floor listing.

Viacom Inc fell 4.2 percent after Reuters reported CBS Corp planned to make an all-stock offer that valued the media company below its current market valuation. CBS shares rose 0.9 percent.

Advancing issues outnumbered decliners on the NYSE for a 3.08-to-1 ratio and for a 3.18-to-1 on the Nasdaq.

Stock futures pointed to higher opening ; hopes on North Korea open to talks

Global Stock Markets

U.S. stock futures pointed to a sharply higher opening after South Korea said it would hold its first summit in more than a decade with North Korea and that the latter was open to talks with the United States on denuclearization.

Appetite for risk assets picked up across global markets on Tuesday as investors digested an apparent diplomatic breakthrough with North Korea and judged fears of a full-blown trade war overdone.

European stocks followed Asian peers higher, extending a rebound as U.S. President Donald Trump faced resistance in his plans for a series of import tariffs. In the latest development, the European Commission proposed some retaliatory measures on U.S. goods. The euro rallied.

Optimism was boosted as the South Korean president’s office said North Korea is open to denuclearization if the safety of Kim Jong Un’s regime is guaranteed. Treasuries, often bought as safe-haven assets, declined. U.S. equity futures extended gains, and the dollar weakened.

The rebound in stocks suggests fears of an escalation of protectionism may be easing, even as Europe mulls its potential response to U.S. duties. Trump is facing domestic resistance to his planned levies on steel and aluminum imports -- House Speaker Paul Ryan has called on him to reconsider, while White House economic adviser Gary Cohn is said to be arranging a meeting between Trump and U.S. executives in a bid to halt the order.

Elsewhere, Bank of Japan Governor Haruhiko Kuroda appeared to dial back some of his recent perceived hawkishness. The Australian dollar pared gains as the central bank left interest rates unchanged and gave no indication an increase is coming soon. And in Italy, stocks and bonds rose as the country began the potentially lengthy process of forming a new government.

Stocks
The Stoxx Europe 600 Index climbed 0.7 percent as of 7:06 a.m. New York time.
Futures on the S&P 500 Index rose 0.5 percent to the highest in a week.
The MSCI Asia Pacific Index surged 1.3 percent, the first advance in more than a week and theargest jump in nine months.
The U.K.’s FTSE 100 Index jumped 0.9 percent, the biggest increase in more than three weeks.
The MSCI Emerging Market Index climbed 1.7 percent.

Currencies


The euro gained 0.5 percent to $1.2393, the strongest in more than two weeks.
The British pound increased 0.4 percent to $1.3904 on the biggest climb in almost three weeks.
The Japanese yen fell 0.1 percent to 106.35 per dollar.
South Africa’s rand jumped 0.7 percent to 11.747 per dollar, the strongest in a week.
The MSCI Emerging Markets Currency Index jumped 0.5 percent on the largest climb in almost five weeks.

Bonds
The yield on 10-year Treasuries rose one basis point to 2.90 percent, the highest in more than a week.
Germany’s 10-year yield climbed five basis points to 0.69 percent on the largest surge in almost four weeks.
Britain’s 10-year yield climbed six basis points to 1.495 percent on the biggest surge in almost four weeks.

Commodities
West Texas Intermediate crude climbed 0.6 percent to $62.96 a barrel, the highest in a week.
Gold rose 0.5 percent to $1,327.23 an ounce, the highest in more than a week on the biggest advance in more than a week.

Earnings boost for stocks may lose luster with rising yields

Global Stock markets

There is little doubt on Wall Street that U.S. corporate profits are on track to rise at a healthy rate this year, with an overall estimate for growth of almost 20 percent. 

Less certain, however, is how investors should value those profits with price-to-earnings estimates. The struggle to do so could lead to more stock market volatility. 

The valuations issue has gained fresh prominence for market strategists amid a rise in interest rates and bond yields, along with concerns about inflation increasing. 

Those factors, including a yield on the benchmark 10-year U.S. Treasury note US10YT=RR that is approaching 3 percent, has prompted investors to rethink how to price stocks, which have become more expensive as the nearly nine-year bull market has aged. 

Indeed, some investors are weighing whether equities deserve lower valuations. 

A test for equity valuations could come with next Friday’s U.S. employment report for February. 

Last month’s report revealed surprising wage gains that sparked concerns of inflation, in turn setting off a jump in yields and drop in stocks. 

Stocks are commonly valued by comparing their price to their estimated profits over the next year, known as the price-to-earnings, or P/E, ratio.

VOLATILITY

The P/E ratio on the benchmark S&P 500 index .SPX had climbed to 18.6 times by the end of January, the highest level in about 15 years. 

That was just before the market plunged at the start of February, dropping 10 percent and confirming a correction, and in turn lowering the P/E ratio to 17 times earnings estimates.

The S&P 500 fell 1.3 percent on Thursday after President Donald Trump said the United States would impose tariffs on steel and aluminum, raising concern about higher prices and a trade war, though that made the index’s valuation only modestly cheaper.

Half of the S&P 500’s returns last year stemmed from the P/E going up - investors willing to pay more for future earnings - helped by optimism about the global economy.

The good news for stock investors is that S&P 500 earnings are expected to jump 19.2 percent in 2018, the biggest increase since a 40.3 percent rise in 2010, as the United States emerged from the financial crisis.

An examination of the six other years in which S&P 500 earnings growth topped 15 percent, along with increasing 10-year Treasury yields and the Federal Reserve raising interest rates, found that P/E multiples shrank in all but one year, but the index still managed gains.

Lerner expects the stock market will be able to maintain a forward P/E of around 16 times. 

That is cheaper than current levels, but above the S&P 500’s long-term average of 15 times.

RPT-Wall St Week Ahead-Earnings boost for stocks

Global Stock Markets

There is little doubt on Wall Street that U.S. corporate profits are on track to rise at a healthy rate this year, with an overall estimate for growth of almost 20 percent. 

Less certain, however, is how investors should value those profits with price-to-earnings estimates. The struggle to do so could lead to more stock market volatility. 

The valuations issue has gained fresh prominence for market strategists amid a rise in interest rates and bond yields, along with concerns about inflation increasing. 

Those factors, including a yield on the benchmark 10-year U.S. Treasury note that is approaching 3 percent, has prompted investors to rethink how to price stocks, which have become more expensive as the nearly nine-year bull market has aged. 

Indeed, some investors are weighing whether equities deserve lower valuations. 

A test for equity valuations could come with next Friday’s U.S. employment report for February. 

Last month’s report revealed surprising wage gains that sparked concerns of inflation, in turn setting off a jump in yields and drop in stocks. 

Stocks are commonly valued by comparing their price to their estimated profits over the next year, known as the price-to-earnings, or P/E, ratio. 

VOLATILITY

The P/E ratio on the benchmark S&P 500 index had climbed to 18.6 times earnings estimates by the end of January, the highest level in about 15 years.

That was just before the market plunged at the start of February, dropping 10 percent and confirming a correction, and in turn lowering the P/E ratio to 17. 

The S&P 500 fell 1.3 percent on Thursday after President Donald Trump said the United States would impose tariffs on steel and aluminum, raising concern about higher prices and a trade war, though that made the index’s valuation only modestly cheaper. 

The good news for stock investors is that S&P 500 earnings are expected to jump 19.2 percent in 2018, the biggest increase since a 40.3 percent rise in 2010, as the United States emerged from the financial crisis.

An examination of the six other years in which S&P 500 earnings growth topped 15 percent, along with increasing 10-year U.S.

Treasury yields and the Federal Reserve raising interest rates, found that P/E multiples shrank in all but one year, but the index still managed gains, according to Keith Lerner, chief market strategist with SunTrust Advisory Services in Atlanta. 

Lerner expects the stock market will be able to maintain a forward P/E of around 16 times. 

That is cheaper than current levels, but above the S&P 500’s long-term average of 15 times, according to Datastream. 

But Paulsen said he believed stocks may be overpriced and that Leuthold recently reduced U.S. equity exposure in its main funds. Among his concerns was whether inflation is about to rise more sharply. 

Global Stocks notched up; Dollar dips

Global Stock Markets

Global stocks notched further gains on Monday and the dollar stayed on the back foot, as investors bet the new head of the U.S. Federal Reserve will steer a steady course on policy when he addresses lawmakers this week.

MSCI’s index of world stocks was up 0.4 percent, with the pan-European Stoxx 600 up 0.7 percent.

Asian markets also rose, with Chinese stocks up 1.2 percent after the ruling Communist Party set the stage for President Xi Jinping to stay in office indefinitely. 

Much of the market’s focus during the coming week will be on monetary policy, with the heads of the European Central Bank and Bank of England set to give speeches. But they are likely to be overshadowed by Fed chair Jerome Powell. 

U.S. stock markets calmed on Friday after the Fed said it saw steady economic growth continuing and no serious risks on the horizon. 

Investors also seem to be wagering that Powell will stick to that script at his first appearance before the House on Tuesday, followed by testimony to the Senate on Thursday. 

The expected lack of policy surprises from Powell saw yields on U.S. 10-year Treasuries back off to 2.86 percent and away from a four-year top of 2.957 percent, dragging down the dollar. 

The currency surrendered early gains to dip 0.3 percent against a basket of currencies to 89.66. That followed a 0.8 percent bounce last week. 

Sterling was up 0.5 percent on Monday after Bank of England deputy governor Dave Ramsden said the bank might need to raise interest rates somewhat sooner than he had expected if wage growth picked up early this year. 

The pound also benefited from hopes that Britain’s exit from the European Union might be less disruptive than feared, with opposition leader Jeremy Corbyn set to give a speech on Monday backing a new customs union with the bloc. 

The euro was 0.3 percent firmer on the back of dollar weakness, though investors largely held back from taking big positions ahead of a national election in Italy and the conclusion of coalition talks in Germany. 

ECB President Mario Draghi is also set to appear before the European Parliament later in the day, while BoE governor Mark Carney speaks in Edinburgh on Friday. 

In commodities, oil prices steadied after hitting their highest level in nearly three weeks, supported by comments from top exporter Saudi Arabia that it would continue to curb shipments in line with the OPEC-led effort to cut global supplies.

US Markets : Top 5 Things to Know today

Global Stock Markets

Top 5 Things to Know in the Market today

1. Global Stocks Slump Amid Fed-Driven Jitters

Global stocks were on the backfoot, after minutes of the Federal Reserve's January meeting underlined expectations for faster U.S. interest rate hikes, souring appetite for riskier assets around the world.

Asian markets ended broadly lower, with Hong Kong's Hang Seng and Japan's Nikkei 225 faring the worst, closing down around 1.5% and 1.1% respectively.

But Chinese markets were in a better mood, returning from their long holiday break with a gain of about 2.2% for the Shanghai blue-chip index.

In Europe, stocks were notably weaker in mid-morning trade. The Stoxx Europe 600 index, the region's broadest measure of share prices, fell 0.9%, with all sectors and major bourses in negative territory.

Meanwhile, early indications from U.S. futures suggest another day in the red for Wall Street. Dow futures were down nearly 100 points, or around 0.4%, while S&P 500 futures fell 5 points, or about 0.2%. Nasdaq 100 futures lost 30 points, or roughly 0.4%.

U.S. stocks ended a tumultuous session firmly lower on Wednesday, with the Dow erasing gains of nearly 300 points following the release of the hawkish Fed minutes.

2. Dollar, Treasury Yields Stand Tall Thanks To Hawkish Fed View

The U.S. dollar rose to a one-and-a-half-week high against a basket of major currencies, boosted by speculation the Fed will raise interest rates at a faster pace than currently expected.

The dollar index, which gauges the U.S. currency against a basket of six major rivals, reached its best level since Feb. 12 at 90.17 in overnight trade. It was last at 90.05, well above a three-year low of 88.15 touched last week.

Meanwhile, yields on the 10-year bond were last trading at 2.925%. They rose to a four-year peak of 2.957% a day earlier, creeping ever closer to 3% - a huge psychological milestone for bulls and bears alike.


3. Oil Under Pressure Ahead of EIA Weekly Supply Report

The U.S. Energy Information Administration will release its weekly report on oil supplies, which comes out one day later than usual due to Monday's Presidents' Day holiday, at 11:00AM ET (1600GMT), amid analyst expectations for a gain of nearly 1.8 million barrels.

The American Petroleum Institute said late Wednesday that U.S. oil inventories fell by 0.9 million barrels last week. There are often sharp divergences between the API estimates and the official figures from EIA.

Oil prices were under pressure, with WTI crude futures dropping 1% to $61.11 per barrel, while Brent crude futures were at $64.91 per barrel, down 0.8%.

4. Bitcoin Slides Back Towards $10,000-Level

The prices of major cryptocurrencies continued lower for the second day in a row, with Bitcoin, Ethereum and Ripple all suffering significant declines, as overall market sentiment waned.

The price of the world's biggest virtual currency by market cap, Bitcoin lost around 4% to $10,521, after hitting an overnight low of $10,200. After nearly doubling in price since the Feb. 6 low close to $6,000, traders have begun dumping some of their holdings, market participants said.

The news was no better for other major digital currencies, with Ethereum, the world’s second largest cryptocurrency by market cap, falling around 5% to a one-week low of $842.20.

The third largest cryptocurrency Ripple slumped around 4% to trade at $0.96571. It has declined more than 60% so far this year, making it one of the worst performing digital currencies of 2018.

5. UK Economic Growth Revised Lower

Britain's economy grew more slowly than first thought during the three months to December, official figures showed, raising questions about the economy's strength as the Bank of England prepares to raise interest rates.

Gross domestic product grew by 0.4% between October and December, the Office for National Statistics said, below economists' forecasts and a preliminary estimate of 0.5%. In year on year terms, downwardly revised growth of 1.4% was the weakest in more than five years.

The pound lost ground against the dollar, with GBP/USD falling to a one-week low of 1.3880.

Global dividends hit record of $1.25 trillion in 2017, more to come

Global Stock Markets

Global dividends rose 7.7 percent to an all-time high of $1.25 trillion (£891 billion) last year boosted by a buoyant world economy and rising corporate confidence, Janus Henderson (JHG.N) said on Monday, predicting another record year ahead.

The surge - the strongest since 2014 - was driven by increases in every region and almost every industry with record showings in 11 countries including the United States, Japan, Switzerland, Hong Kong, Taiwan and the Netherlands, the investment manager added.

For 2018 Janus Henderson expects dividends to keep the same 7.7 percent growth rate to reach around $1.35 trillion, as corporate and economic growth remains strong even in more volatile financial markets.

Royal Dutch Shell (RDSa.L) kept its position as the world’s biggest dividend payer. China Mobile (0941.HK) rose to second from 19th last year and was followed by Exxon Mobil (XOM.N), Apple (AAPL.O) and Microsoft (MSFT.O), the report said.

The top 20 payers accounted for 15.7 percent of the total payout.

Adjusting for movements in exchange rates, special one-off dividends and other factors, global dividends rose 6.8 percent last year and are expected to rise another 6.1 percent in 2018.

Janus said 2017’s dividend growth showed less regional divergence than in previous years, reflecting the broadly based global economic recovery, though Europe lagged behind.

European dividends rose just 1.9 percent to $227 billion, weighed down by cuts from a handful of large companies in France and Spain, lower special dividends and a weak euro during the second quarter, when most dividends are paid, it said.

In the UK, headline growth was held back at 3 percent by the weak pound, but underlying growth was 10 percent as UK-listed multinational mining companies rapidly restored dividends that had been cut during the lean years for commodity prices.

The Asia Pacific region posted the strongest headline growth rate of 18.8 percent to 139.9 billion, followed by Emerging Markets, up 16.5 percent to $102.4 billion, while dividends in North America grew 6.9 percent to a record of $475.6 billion.

Janus said every industry saw higher underlying dividends in 2017 except telecoms, which was flat. The mining industry saw by far the fastest growth, up 27.2 percent on an underlying basis.

Stocks set for best week in 6 years

Global Stock Markets

World shares were set for their best week of gains in six years on Friday after two consecutive weeks in the red, shrugging off a rise in global borrowing costs while the dollar hit its lowest since 2014.

MSCI’s world index of stocks, which tracks shares in 47 countries, was up 0.3 percent after European bourses opened. After suffering its biggest weekly drop since August 2015 last week, the index is now on track for its best showing since early December 2011.

Some investors have been puzzled at the quick rebound, which has coincided with a rise in bond yields on signs that inflation is starting to creep up globally.

The argument commonly offered by economists has been that historically, it is not unusual for stocks and bond market borrowing costs to rise in tandem in a rapidly expanding economy.

Yields across the euro area were mostly steady, although Germany’s benchmark Bund was within sight of 2-1/2-year highs and set for its biggest weekly rise in eight weeks.

Investors were also watching for a sovereign debt rating update on Greece from Fitch, set for release later in the day.

European shares were also set to chalk up healthy weekly gains, snapping a three-week losing streak as earnings updates continued to impress, and volatility and jitters over rising inflation eased.

Among country benchmarks, the UK’s FTSE was up 0.6 percent and Germany’s DAX added 0.5 percent, while Italy’s FTSE MIB was up 1 percent.

The pan-European benchmark is up 3 percent so far this week, set for its best week since December 2016, but still down around 6 percent from the 2-1/2-year peak it hit in January.

With many Asian markets closed on Friday for the Lunar new year, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent.

Japan’s Nikkei rose 1.2 percent, with investors relieved to see the government appoint Bank of Japan Governor Haruhiko Kuroda for another term, suggesting the central bank will be in no rush to dial back its massive stimulus programme.

Equity investors have drawn a degree of reassurance from a fall in the VIX index - a measure of implied volatility on the S&P 500 index, also known as Wall Street’s “fear gauge”.

The index dropped below 20 for the first time since it spiked to a 2-1/2-year high of 50.3 last week, a jump that caused massive losses among investors who bet equity markets would stay stable on a combination of solid economic growth and moderate inflation.

Shares fragile, U.S. budget deal puts bonds on defensive

Global Stock Markets

World stock markets remained on shaky ground on Thursday as U.S. bond yields crept back towards four-year highs after U.S. congressional leaders reached a two-year budget deal to raise government spending by almost $300 billion. 

While the deal was a rare display of bipartisanship that should stave off a government shutdown, it looks set to widen the U.S. federal deficit further and could fan inflation -- prompting the Federal Reserve to lift interest rates faster.

The Bank of England meets later in the day and is expected to say that another rate increase could be nearing as Britain’s economy grows faster than expected.
European stock markets opened the day lower, with blue-chip indexes in Frankfurt, Paris and London down 0.3-0.7 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan ticked up 0.1 percent, but remained near six-week lows hit earlier this week amid a rout in world stocks.

In China, Shanghai’s benchmark index hit a six-month low, even as data showed the country’s trade performance in January had exceeded expectations.

Investors remained wary after an aggressive selloff in equities in the past week on worries about the prospects of rising interest rates, which would shut off the liquidity spigot that has fed an exuberant rally in riskier assets.

Still, U.S. stock futures traded higher, pointing to a firm opening for Wall Street shares after the U.S. budget deal.

The Cboe Volatility Index, known as the VIX and often seen as investors’ “fear gauge”, fell 2.3 points to 27.73, but that was still more than twice the levels generally seen in the past few months.
Combined with an expected economic boost from President Donald Trump’s planned tax cuts, the increased deficit spending could overheat already strong U.S. growth and accelerate inflation to levels not seen over a decade.

Such fears drove the 10-year U.S. Treasury yield back up to 2.84 percent, near Monday’s four-year peak of 2.885 percent.

The Senate and the House were both expected to vote on the deal on Thursday, amid some opposition on both sides of the aisle.


In Europe, bond yields were also higher, with the prospect of increased fiscal spending after Wednesday’s coalition government deal in Germany adding to some upward pressure on yields.

In currency markets, sterling was a touch weaker at $1.3865, not far from Tuesday’s two-week low of $1.3838, ahead of a Bank of England meeting.

The BoE is widely expected to keep rates on hold as it weighs up the impact of November’s rate rise on the economy.

Investors are more focused on whether any of the nine rate-setters vote for a hike at this meeting. That would be seen as adding to the likelihood of an increase in May, the next time the BoE is due to update its economic forecasts.

The budget deal in Washington supported the dollar against a broad range of currencies. At 0942 GMT it stood at 90.554, up 0.33 percent on the day.

Europe’s single currency dipped to $1.2231, its lowest level in more than two weeks, while the dollar was 0.3 percent firmer at 109.66 Japanese yen.

New Zealand’s dollar fell to a four-week low at $0.7190 after New Zealand’s central bank lowered its forecasts for inflation right out to 2020 and said stock market volatility this week was a warning that investors were nervous about the risk of higher inflation and rising interest rates.

The Chinese yuan, which last month posted its biggest monthly gain ever, slipped back 0.5 percent to 6.3205 per dollar.

Oil prices largely reversed earlier falls on Thursday as a North Sea pipeline outage and record Chinese imports countered U.S. crude production soaring past 10 million barrels per day.

MARKET SNAPSHOT: U.S. Stocks On Track For Weekly Rise With Data Deluge On Deck

Global Stock Markets

U.S. stock futures tilted higher on Friday, indicating weekly gains across the board and possibly a fresh record for the Dow average.

Dow set to power to fresh records

Traders were waiting for a pre-Christmas data dump ahead of the bell, which could help steer markets on the last trading day before the holidays.

What are markets doing?

Futures for the Dow Jones Industrial Average added 30 points, or 0.1%, to 24,808, set to build on a 0.2% gain from Thursday. The blue-chip gauge in that session (http://www.marketwatch.com/story/us-stocks-seen-in-holding-pattern-as-investors-look-for-fresh-catalysts-after-tax-bill-2017-12-21) closed just 0.04% below its all-time close, so if the index holds its premarket gain it could rack up another record on Friday.

Futures for the S&P 500 index climbed 2.95 points, or 0.1%, to 2,690.75, while those for the Nasdaq-100 index added 5 points, or 0.1%, to 6,497.25.

As of Thursday's close, all three major benchmarks were on track for weekly gains, with the Dow average up 0.5%, the S&P 500 higher by 0.3% and the Nasdaq Composite Index up by 0.4%.
What's driving the markets?

The gains this week have come after the House of Representatives and the Senate approved a sweeping tax reform package, cutting the corporate tax rate to 21% from 35%, among other things.

All there is left for the tax bill now is for President Donald Trump to sign it into law.
Expectations of the tax reform have boosted markets in recent weeks on hopes it will give U.S. companies a boost and speed up economic growth. However, Morgan Stanley recently warned that the official passage of the bill could represent a near-term top for market

Meanwhile in Europe, Spanish stocks slumped after parliamentary elections in Catalonia handed a win to the separatist movement (http://www.marketwatch.com/story/spanish-stocks-slump-after-separatists-win-catalonia-election-2017-12-22), rekindling fears of the re-emergence of tensions in Spain.

Which stocks are in focus?
Shares of Nike Inc.(NKE) fell 2.3% in thin premarket trade after the athletic gear company late Thursday reported earnings that topped Wall Street estimates but North American sales fell below consensus estimates.

Boeing Co.(BA) could also move after news the company is in takeover talks with Brazilian aircraft maker Embraer SA

Stocks in Asia closed mostly higher, with Japan's Nikkei 225 index rising 0.2% to 22,902.76.
Oil prices dropped 0.5% to $58.06 a barrel, while gold was up 0.1% at $1.271.60 an ounce.

The ICE dollar index was up 0.1% at 93.379.

Equities: An Overview

Global Stock Markets

We cover the S&P500 (SPY) extensively on we will move on to a market we usually don’t, the Russell 2000 ETF (IWM).

We often look for a trend to unwind in the same way it began, giving rise to equality targets where wave 5 is equal in length to wave 1. IWM is particularly interesting, as not only is wave 5 comparable in size to wave 1, but the structures are similar too (shown by the pink outlines). This suggests it should continue higher to the $156-159 area, but it also warns this trend is mature and should complete soon.

The continuation/midway gap (circled) occurred just where it should, in the middle of wave iii of 3 and the strongest part of the trend. Using this as our midway point projects a high in the same area, $159-$160.

Leading stocks also help form a view of the broader market. Here is Apple (AAPL), which is reaching for the $180 equality target. And Amazon (AMZN), which is again late cycle and poking through the top of the trend channel. Netflix (NFLX) has a clear trend which will complete on the next highs. Alphabet (GOOGL) has an interesting fractal where the price action following each earnings gap repeats (on a smaller scale). This suggests a period of consolidation before another small rally. The main takeaway from these charts is they are late cycle. Swing trades are still very rewarding, but this is certainly not the time to buy and hold as when these trends complete there will be a large correction.

Precious Metals
Gold (GLD) and silver (SLV) have gone to sleep, but the question is, which way will they jolt when they wake up? We are still looking for a significant move higher, although the price action is very messy in this range. The gold miners ETF (GDX) probably has the clearest view, and may be setting up a bullish triangle. We wouldn’t want to say the low is definitely in, but as a general guide, the next significant move should be higher, and break the $25.6 highs.

Oil (USO)
Oil got to within a dollar of the $60 target and should now pull back to $55 again. We would buy the dip if it looks ‘right’ (we will try and leave a comment when/if price tests this area), but as it would be the second re-test of the $55 break-out area, we have to be careful as a failure could get bearish very quickly. The bigger picture shows stiff resistance at $59-60 with dual channel highs and the 161.8* Fib extension.

Natural Gas (UNG)
Natural gas continues to trade very erratically, at least from a technical perspective. The breakout of the triangle was textbook, as was the re-test. but then it all failed completely, only to recover again.
Actually the price action reminds us a lot of this time last year. First there is a sideways range over summer, then a fake break higher, before a much larger rally. It suggests NG could continue higher until the end of the year before making a top.

The Dollar (UUP)
The dollar reversed from 94.9 to re-test the broken trend channel. It should now recover to a lower high (below 94.9) before resuming lower. EURUSD (FXE) has a bullish pattern, but this will probably only lead to erratic moves around the 1.185 levels rather than a high probability trade.

Conclusions
The above charts map what we think are the most likely scenarios in various markets and are based on our interpretation of probabilities. Combined with other analysis, and good money management, they can help frame profitable trades.

Lucky 13? Global stocks score longest run of monthly gains on record

A dive in high-flying U.S. tech stocks on worries their boom may have peaked left investors wondering on Thursday whether the longest global equity bull run in living memory might be starting to splutter. 

The caution was sparked by an overnight Wall Street wobble involving a rotation from tech to financials and came just as the near 9-year global rally notched up another impressive milestone. 

The world’s broadest equity gauge – the MSCI all-country index – was on course to finish November with its 13th straight monthly gain – the longest such winning streak in the index’s 30-year history. Lucky for some. 

Though the celebrations were muffled slightly by the tech problems - China stocks had also taken another tumble in Asian trading - the mood seemed to be improving again in Europe. 

Germany’s Dax and France’s CAC 40 both inched up for a third day, though London’s FTSE was back in the red as hopes of a breakthrough in Brexit negotiations pushed the pound higher again. 

“I‘m not sure one would say it’s a bubble (in tech stocks),” said Andrew Milligan, head of investment strategy at Standard Life. “By and large the companies are generating either good profits or the potential for good profit growth”.

Possibly weighing on tech were concerns, sparked by a Morgan Stanley report earlier this week, that the “super-cycle” in memory chip demand looks likely to peak soon.

Shares of Amazon.com, Apple, Google parent Alphabet and Facebook fell between 2 percent and 4 percent. Among the year’s other high fliers, Netflix slid 5.5 percent while Asia’s bellwether Samsung slumped 4.3 percent to two-month lows. 

The Nasdaq index is still up 26.8 percent so far this year, roughly 7 percentage points above gains in the MSCI world.

The tech nerves were not just confined to stocks. Rocketing cryptocurrency Bitcoin dropped a cool $1,000 to a low of $9,250 before clawing back nearly 3 percent in Asia and Europe to around $10,100. 

Credit Suisse Sees Equities Rising Further Next Year on Economy

Global Stock Markets

Credit Suisse Group AG says it’s not too late to join the stock-market rally as an accelerating global economy drives gains into 2018.

 Even after a year of exceptionally good returns in risk assets, Credit Suisse investment strategists believe that global equity markets have further upside potential in 2018, the Zurich-based bank said Thursday in its investment outlook for next year. Economic growth is expected to remain robust in the months ahead, supported by both advanced and emerging markets.

Stocks globally have been on a tear. U.S. stocks reached all-time highs in the run-up to the Thanksgiving holiday, while the MSCI Asia Pacific Index surpassed its 2007 peak based on closing prices. The Asian equity gauge has outperformed its U.S. and European peers this year, led by surging Chinese stocks such as China Evergrande Group and Sunac China Holdings Ltd.

Credit Suisse -- which generally favors equities over credit -- said emerging-market stocks will probably generate low double-digit returns in 2018, with small caps likely to lead the way. Japanese and Swiss shares are seen offering the best potential in developed markets. Preferred industries include healthcare, financials, telecoms and industrials. The bank also highlighted euro-zone real estate equities.

Bond yields in most developed markets will probably rise moderately, with U.S. 10-year yields reaching 2.7 percent by the end of 2018, Credit Suisse said.

Corporate capital spending, merger-and-acquisition activity and, in turn, increasing corporate debt look set to become big topics in 2018, Credit Suisse Global Chief Investment Officer Michael Strobaek said. We expect 2018 to be a relatively good year for economic growth, which should help growth-sensitive assets continue to do well.