Yahoo Finance Trade Tensions Simmer, Banks Lead EU Lower, Earnings Still In Focus
Asian Markets Mixed As Trade Tensions Simmer
Asian markets were flat and mixed at the end of Tuesday trading as renewed trade tensions cast a pall on this week’s negotiations. China claims the US is stifling their economic development by fanning cybersecurity fears. The fear is that foreign business, government, and personal security is at risk from Chinese technology. The hang-up is not new, it is one of the key issues at stake in the US/Sino trade war, and may throw this weeks talks off track.
Trade talks are scheduled to start today in Washington. This is the third round of key talks since the first of the year and markets are expecting to see some progress. Early in the week, lower-level talks will lead to higher-level talks and the possibility Trump will postpone his March 1st deadline.
The Hong Kong Heng Seng led declining markets with a loss of -0.42% and was followed by the Korean Kospi. Banks led the losses with HSBC in the lead. The Hong Kong-listed shares fell -1.48% on weak earnings and sparked weakness in the global banking sector. The Australian ASX led advancing markets with a gain of 0.28%, followed by the Nikkie and Shanghai with gains of 0.10% and 0.05%.
The Banks Lead EU Markets Lower
EU indices were mostly lower in early Tuesday trading after HSBC missed earnings expectations. Europe’s largest bank says revenue and earnings were impacted by volatility and uncertainty around the Brexit and US/China trade relations. The bank also says the Brexit and US/China trade relations will put up hurdles in 2019; shares fell -4.0% in EU trading.
The UK FTSE 100 led the decline with a loss of -0.62% as weaker than expected wage data helped depress sentiment. The French CAC was in second place with a loss near -0.40% followed by the German DAX at -0.16%. In Germany, the trading sentiment was lifted by Heidelberg Cement. The company says it sees no impact from Brexit or trade concerns and has increased its outlook for cement demand this year. Shares of that stock were moving higher at midday.
Earnings Are Still In Focus For US Traders
Earnings season is winding down in the US but still a focus for traders. Today’s news includes pre-opening reports from Walmart and Advance Auto Parts. Both stores delivered revenue in line with expectations and EPS above consensus but shares of the two stocks did not respond the same. Walmart moved higher, aided by an increase to the dividend, while shares of Advance moved lower to retrace gains seen in the previous week.
The major indices were moving lower in early futures trading, down about -0.25% across the board, but the losses were minimal. The sentiment is weighed down by trade-related angst but there is still hope a deal can be done. The risk for this week is that talks will stall or in some way lead traders to think the March 2nd tariffs will be implemented. This week traders will also be watching for the FOMC minutes, due out on Wednesday, as well as a raft of data due on Thursday.
This article was originally posted on FX Empire
