|Day's range||28,494.64 - 28,649.44|
|52-week range||24,540.63 - 30,280.12|
It’s been more than two weeks since U.S. President Donald Trump and Chinese President Xi Jinping agreed to resume trade talks between the two economic powerhouses. However, conditions haven’t improved much.
Wall Street eased back from record highs on Tuesday amid worries over US-China trade talks, adding to the cautious mood in global markets as investors fixated on the first round of earnings from America’s banking heavyweights. President Donald Trump told reporters at the White House the US still has a long way to go before reaching a trade accord with China. The remarks helped drag stocks from record highs seen in the prior session.
Due to the uncertainty caused by the US-China trade dispute, and the possibility that trade tensions may escalate again, some investors are sitting on the sidelines, hoping the People’s Bank of China steps in to introduce more fiscal stimulus in the months ahead to steady the economy and to prevent it from slowing too quickly.
Global shares were mixed Monday after China reported that its economy grew at the slowest pace in at least 26 years in the last quarter, leading investors to opt for caution despite Friday's record highs on Wall Street. Tariff hikes by President Donald Trump have battered Chinese and U.S. exporters, and Chinese leaders have increased spending and loosened controls on bank lending to keep growth within this year's range of 6% to 6.5%. The 6.2% annual rate of growth China reported for April-June was the lowest since China began reporting such data in 1993.
Shares were mixed in Asia on Monday, with gains in Chinese markets on hopes for fresh stimulus measures after the government reported that the economy grew at the slowest pace in a decade in the last quarter. Analysts said the 6.2% annual rate of growth reported for April-June suggests the trade war between the U.S. and China is hammering industries. The Shanghai Composite index gained 0.4% to 2,942.19 while Hong Kong's Hang Seng index gained 0.2% to 28,536.36.
A gauge of global equities lost ground on Tuesday and U.S. Treasury yields moved higher as a stronger-than-anticipated report on retail sales raised the possibility the Federal Reserve could adopt a less dovish stance. U.S. retail sales rose 0.4% in June, as households stepped up purchases of motor vehicles and a variety of other goods. While the Fed is still largely expected to cut rates by a quarter of a percentage point at its July 30-31 policy meeting, expectations for a more aggressive half a percentage point cut have been scaled back.
On July 10, Federal Reserve Chairman Jerome Powell helped turn the global equity markets higher after he signaled a rate cut by the Fed at the end of July. He cited slowing business investments across the U.S. due to lingering uncertainties over the economic outlook as key reasons for his dovish tone.
European stocks traded slightly higher Thursday afternoon after U.S. Federal Reserve Chairman Jerome Powell signaled that the central bank could cut interest rates imminently.
European stocks traded lower Tuesday as a warning of an autos slowdown from German chemicals giant BASF dragged down autos and chemicals companies.
South Korea’s KOSPI fell as shares of technology industry heavyweight Samsung Electronics fell more than 1% after reporting that second-quarter profit likely dropped 56% as compared to a year ago. There is a growing dispute between Japan and South Korea over wartime forced labor, which will likely exacerbate the situation for Samsung, as well as other semiconductor rivals in South Korea like SK Hynix.
A strong U.S. jobs report that tempered expectations of an aggressive interest rate cut by the Federal Reserve later this month and weak economic data in Germany helped push global stock indices lower on Friday after hitting record highs earlier this week. Nonfarm payrolls increased by 224,000 last month as government employment rose by the most in 10 months, the U.S. Labor Department reported. The better-than-expected showing reduced the likelihood the Fed will cut interest rates at its next meeting later this month.
Shares in Australia are being boosted by the Reserve Bank of Australia’s (RBA) decision to cut interest rates for the second consecutive month. Higher commodity prices are also providing support for the Australian stock market. They are being driven by rapidly rising iron ore prices.
European stocks traded higher Tuesday after U.S. President Donald Trump said trade talks with China have "already begun."
Given the generally weak performance in the major U.S. indices after the gap-higher opening, the rise in chipmaker stocks probably prevented an across the board loss for the day. The Reserve Bank of Australia cut its benchmark interest rate to an historic low of 1 percent.
The global equity markets were mostly lower ahead of the opening bell as investors digested tensions between Iran and the US. There are two Fed member speeches today that stand to move the markets, depending on the message conveyed.
The early sentiment in Asia indicates that sellers have gained the upper hand. It’s not a bearish tone, per se, but rather one being dictated by long liquidation by those investors who want to avoid the pain of another steep sell-off, and aggressive short-sellers betting on the worst outcome.
US equities are set for a modestly higher open while global equities are mixed to start the new week. The focus for equity traders will be on a meeting between Trump and Xi that takes place later this week.
The new worry is a potential escalation of the tensions between the United States and Iran. This could limit gains today by encouraging investors to lighten up their long positions.
After presenting a plethora of data and projections, Fed Chair Jerome Powell held a press conference. It was at this press conference that he opened the door to the possibility of a rate cut as soon as July. He said, “Many participants now see the case for somewhat more accommodative policy has strengthened.”