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)

Asia shares bounce from 2-month lows as trade war fears ease

Asian Stock Markets

Asian shares bounced from two-month lows on Thursday as world equities recovered from a selloff triggered by escalating Sino-U.S. trade tensions, with investors hoping a full-blown trade war between the world’s two biggest economies can be averted. 

Sentiment was lifted as the United States expressed willingness to negotiate a resolution to the trade fight after the proposed U.S. tariffs on $50 billion in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, a day after it hit its lowest in almost two months. Trade-dependent Singapore’s Straits Times Index rose more than 2.0 percent.

Japan’s Nikkei gained 1.6 percent while markets in mainland China, and those in Hong Kong and Taiwan, are closed for the Tomb Sweeping Day holiday on Thursday.

U.S. S&P 500 mini futures rose 0.4 percent in Asia. On Wednesday, the S&P 500 gained 1.16 percent and the Nasdaq Composite added 1.45 percent, clawing back heavy losses of more than 1.5 percent right from earlier in the U.S. session.

Many investors viewed U.S. President Donald Trump’s latest tariffs plan as part of his negotiation strategy, rather than his final policy.

Indeed, Trump’s top economic adviser, Larry Kudlow, when asked whether the latest U.S. tariffs plan may never go into effect and may be a negotiating tactic, told reporters: “Yes, it’s possible. It’s part of the process.” He called the announcements by the two countries mere opening proposals.

The U.S. trade actions will not be carried out immediately, giving the two countries room for manoeuvre and providing investors with hope of a compromise.

The proposed 25 percent U.S. tariffs on some 1,300 industrial technology, transport and medical products from China now see a public comment and consultation period that is expected to last around two months.

Many suspect Washington will likely back down on some fronts after Beijing threatened tariffs on U.S. soybeans, the top U.S. agricultural export to China.

It is considered one of the most powerful weapons in Beijing’s trade arsenal given the impact on Iowa and other farming states that backed Trump in the election.

Optimists also argued that the global economy is currently running so strong that it could cope with the impact of the proposed tariffs, which cover a fraction of the world’s trade.

U.S. economic data published on Wednesday underscored the prevailing bullish view on the economy. U.S. private payrolls increased solidly in March as hiring rose across the board, boding well for Friday’s jobs data.

Yet others also cautioned that uncertainties caused by fears of a trade war could result in many companies delaying capital expenditure investments in the near term.

Concerns about trade wars could also hit some specific assets, such as U.S. soybeans and corn. Both products licked their wounds after having fallen 2.2 percent and 1.9 percent, respectively, on Wednesday on China’s trade moves.

Oil prices bounced back in tandem with global share prices, and on a surprise draw in U.S. crude stockpiles.

U.S. crude futures traded at $63.71 per barrel, up 0.5 percent.

In the currency market, the recovery in risk appetite helped to boost the dollar against the yen. The U.S. currency changed hands at 106.93 yen, near last week’s high of 107.015.

The euro was little changed at $1.2283, off Tuesday’s two-week low of $1.2254.

The Canadian dollar hit a five-week high of C$1.2745 per U.S. dollar while the Mexican peso held near a six-month high of 18.065 peso to the dollar hit the previous day, both helped by optimism over a NAFTA trade deal.

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.

Europe joins sell-off but Wall Street eyes rebound

European Stock Markets

World markets battled to regain their poise on Tuesday after another round of tech and trade war worries had clobbered shares and oil prices tumbled on signs of rising Russian supply and Saudi price cuts.

Europe’s main markets in London, Paris and Frankfurt were all down more than 0.5 percent, after being closed on Monday when the pace of selling had pushed U.S. markets below pivotal technical levels.

Tech stocks remained the pressure point, dropping more than 1 percent, after more criticism of Amazon by U.S. President Donald Trump and as reports that Apple intended to make more of its own parts burnt European chipmakers like ams AG and STMicroelectronics.

Some signs of stability were emerging, though. Wall Street futures pointed higher, the dollar steadied against the yen after three days of decline and gold and government bonds were in reverse.

Asia’s shares had stumbled overnight, too, although less than Wall Street, where the S&P 500 closed below its 200-day moving average for the first time since Britain’s 2016 vote to leave the European Union.

As well as the tech problems, investors were also wary after China imposed extra tariffs on 128 U.S. products, deepening a dispute between the world’s two biggest economies and stoking concerns about the impact on global growth.

Japan’s Nikkei ended down 0.45 percent, after falling as much as 1.6 percent. China’s Shanghai Composite index eased 0.9 percent and the blue-chip CSI300 was off 0.7 percent.

U.S. Treasuries, German Bunds and UK Gilts all saw a bit of selling, with yields on 10-year notes off two- to three-month lows.

Among the main commodities, Brent oil futures nudged back up towards $68 a barrel. They had fallen more than 3.7 percent on Monday after news of rising Russian output and the escalating U.S.-China trade dispute weighed on sentiment.

U.S. crude gained 14 cents to $63.15, copper jumped 1.4 percent for its fourth straight gain and spot gold ticked down 0.2 percent to $1,338.08 an ounce.

Global Stock Markets - Amazon, Apple weigh on Nasdaq

Global Stock Markets

The Nasdaq Composite index fell on Wednesday, dragged down by losses in Amazon and Apple, while gains in healthcare stocks propped up the Dow and the S&P 500. 

Amazon fell more than 5 percent after reports that President Donald Trump is looking to target the company by changing its tax treatment.

Apple dropped 1.6 percent after Goldman Sachs analyst cut sales estimate for iPhone for March and June quarters, citing weak demand.

However, Facebook’s shares rose more than 2 percent after the company said it was giving users more control over their privacy by making data management easier and redesigning the settings menu.

The social network has lost more than $100 billion in market value since March 16, when it first acknowledged that user data had been improperly harvested by a consultancy firm.

“We had Facebook making some announcements. That’s obviously taking some pressure off the stock at the moment,” said Andre Bakhos, managing director of New Vines Capital LLC in Bernardsville, New Jersey.

“It’s enough to get some short covering, but as far as pouring in, most investors will wait until the dust settles.”

Broader markets have suffered this month on a back-and-forth between the United States and China on tariffs and fears of rising interest rates. The main indexes are on track for their worst month since January 2016.

Comments from top officials in the United States and China had given a sense that both the countries would negotiate over President Donald Trump’s move to impose tariffs on Chinese goods.

China is expected to soon announce a list of retaliatory tariffs on US exports, its state-run Global Times reported on Wednesday.

At 9:55 a.m. ET, the Dow Jones Industrial Average was up 90.99 points, or 0.38 percent, at 23,948.7 and the S&P 500 was up 5.87 points, or 0.22 percent, at 2,618.49.

The Nasdaq Composite was down 18.60 points, or 0.27 percent, at 6,990.21.

The S&P healthcare index was up nearly 1 percent on gains in Allergan, Celgene and Incyte.
Tesla dropped about 4.4 percent after the U.S. government said it would investigate a fatal crash and vehicle fire of a Model X in California.

Lululemon Athletica surged 8.8 percent after the Canadian athletic apparel maker posted a surprisingly strong fourth-quarter profit and forecast further growth in the first quarter.
Advancing issues outnumbered decliners on the NYSE for a 1.41-to-1 ratio and for a 1.06-to-1 ratio on the Nasdaq.