The Tuesday Market Minute
- Global stocks mixed as conflicting signals from U.S.-China trade talks, as well as ongoing protests in Hong Kong, keep sentiment in check.
- Alibaba reportedly closes books early on $13.4 billion secondary offering, boosting non-Japan stocks in a tepid overnight session.
- U.S. dollar edges modestly lower following President Trump's surprise meeting with Fed Chair Powell during which he "protested" the greenback's strength on foreign exchange markets.
- European stocks hit fresh four-year high as auto sales improve; trade hopes bump DAX to multi-month peak
- Global oil prices drift lower ahead of API data later today that is expected to show a fourth consecutive weekly increase in domestic crude stocks.
- Wall Street futures suggest modest gains, and more record highs, ahead of today's opening bell, ahead of October housing data at 8:30 am and earnings from Kohl's.
Wall Street futures bounced higher again Tuesday, following a mixed session in Asia and solid gains across Europe, amid conflicting signals for a near-term U.S.-China trade agreement an ongoing political protests in Hong Kong.
Reports of increasing pessimism from senior Chinese officials for the willingness of President Donald Trump to roll back tariffs in the event of a near-term deal on trade have added to concerns that negotiations may have stalled, while the U.S. decision to grant a 90-day extension to American companies doing business with Huawei Technologies suggests the administration has adopted a flexible stance towards dealing with Beijing.
Market sentiment was also affected by the ongoing demonstrations in Hong Kong, where protesting students at the city's Polytechnic University remain barricaded from police follow violent clashes over the past few days that have increased pressure on Carrie Lam to end the five-month long protests.
U.S. equity futures, however, look set to post fresh record highs for a third consecutive session Tuesday, ahead of October housing starts and building permits data at 8:30 am and earnings from Kohl's Corp. (KSS) - Get Report .
Contracts tied to the Dow Jones Industrial Average, which closed north of 28,000 points for the first time in history last night, are priced to add 60 points at the opening bell while those linked to the S&P 500, which boosted its year-to-date gain to 24.5% yesterday, are looking at an 8.2 point bump higher at the start of trading later today.
US market gains were pared, however, after Home Depot Inc. (HD) - Get Report trimmed its full-year sales guidance as the world's biggest home improvement retailer said some of its investments won't pay off until 2020. Shares in the group were marked 4.6% lower in pre-market trading, pulling 75 points from the Dow.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.01% lower on the session at 97.78 following yesterday's unscheduled meeting between Trump and Federal Reserve Chairman Jerome Powell, during which the President said he "protested (the) fact that our Fed Rate is set too high relative to the interest rates of other competitor countries ... Too strong a dollar hurting manufacturers & growth!"
European stocks opened firmer, as well, with the Stoxx 600 benchmark rising 0.6% in the opening minutes of trading in Frankfurt to reach a fresh four-year peak of 408.42 points, led to the upside by banking, financial and auto stocks. Germany's DAX index jumped 1.3% after European car sales data showed the strongest gains in a decade, while Britain's FTSE 100 bumped 1% higher in London even as the pound held at 1.2958 against the dollar.
Overnight in Asia, Japan's Nikkei 225 retreated from its recent 13-month highs to close 0.53% lower on the session while solid gains for markets in China and Hong Kong, which were boosted by better-than-expected demand for e-commerce giant Alibaba's (BABA) - Get Report $13.4 billion secondary offering, helped the region-wide MSCI ex-Japan index gain 0.49% heading into the final hours of trading.
Global oil prices drifted modestly higher in overnight trading ahead of American Petroleum Institute data later in the session that is expected to show a fourth consecutive increase in domestic crude stocks.
Brent crude contracts for January delivery, the global benchmark, were seen 7 cents higher from their Monday close and trading at $62.51 per barrel, while WTI contracts for the same month were marked 4 cents lower at $57.01 per barrel.