Global Rally Returns As Markets Fade Trade Fears, Dollar Slides
graphic intense at site.
One day after the biggest S&P drop in a month, stocks have regained their composure putting trade and global growth concerns on the backburner, and global stock indices are generally a sea of green this morning.
Trading was initially choppy overnight as hopes of more stimulus measures from China to shore up economic growth clashed with worries over progress between Washington and Beijing to resolve a trade spat between the world’s top two economies. The MSCI world equity index was down 0.1 percent, with Asian equity markets choppy as the region attempted to shrug off the headwinds from the US, where stocks slumped on Tuesday as the risk averse tone and lingering global growth concerns caught up with the major US indices on return from their extended weekend.
The FT reported that the US turned down China’s offer for preparatory trade talks, which was later denied by NEC Director Larry Kudlow helping U.S. equities pare some losses though the fresh concerns about U.S.-China relations kept share prices in check. Early trade jitters pushed the MSCI index of Asia-Pacific shares ex-Japan lower by 0.2%, stalling after climbing to a seven-week high on Monday.
“The main culprit for the risk-off tone this morning is the change in sentiment around U.S.-China trade talks …. That seeped into Asia overnight and Europe this morning,” said Edward Park, deputy chief investment officer at Brooks MacDonald.
Australia's ASX 200 (-0.3%) was subdued with underperformance in the energy sector after crude prices slipped by over 2% and Nikkei 225 (-0.1%) was dampened by disappointing trade data including the sharpest drop in exports since October 2016.
However, sentiment in Tokyo was propped up by a weaker currency after the BOJ cut its inflationary outlook slashing 2019 core CPI from 1.4% to 0.9%, even as it kept its monetary policy, sending the USDJPY to new highs and boosting local stocks while Japan Display shares surged on reports it is in investment discussions with TPK and Silk Road Fund. 10yr JGBs traded sideways throughout most the session amid the indecisive risk tone in stocks and then saw choppy trade in reflection of sentiment in the region and following an unsurprising BoJ decision to keep policy setting unchanged.
Elsewhere, Hang Seng and Shanghai Composite confirmed trader indecisiveness after mixed actions by the PBoC as it conducted a Targeted Medium-term Lending Facility for the first time ever which was at a lower rate than MLF rates and is aimed at spurring lending to small firms, but conversely refrained from reverse repo operations which resulted to a daily drain of CNY 350bln.
A fresh batch of disappointing corporate updates from European companies further knocked confidence about fourth-quarter earnings, pushing European stocks lower for a third session at the start of trading, with the Stoxx 600 down as much as 0.5%, with bourses all across Europe losing ground as a profit warning by Ingenico sent the French payment group down over 12 percent and hit the whole European tech sector.
However, sentiment reversed sharply just after the open, with most European equities trading mostly higher [Euro Stoxx 50 +0.2%], after recovering from opening losses, taking the lead from Wall Street.
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The algo's rule it all. Fueled by news whether relevant or not…in this case all it takes is the perception of friendly news and it reverses it's loss in futures markets. This will only continue. The system continues to need 'up'. UBS 'earnings' yesterday highlight this need for constant growth for the sake of growth no matter the cost. Client redemptions are speeding up and they need to keep it together so the normies do not equate poor bank(s) performance with the entire system falling apart.
Our friend Oil told the tale late into our yesterday session.
https://www.zerohedge.com/news/2019-01-23/global-rally-returns-markets-fade-trade-fears-dollar-slides
everyday now
Could not be anymoar obvious as it drops right with the opening of NYMEX trading. Not a big amount or % drop just the pattern to make note of
whatever you say