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The Tuesday Market Minute

  • Global stocks edge higher, pulling Wall Street futures into the green, amid ongoing questions over the fate of U.S.-China trade talks and broader market reaction to the weekend's European elections.
  • President Donald Trump says the U.S. "is not ready" to make a deal with Beijing, but hints at an August pact with Japan following a four-day state visit to Tokyo.
  • European stocks slip lower following the weekend's EU elections that saw modest gain for Euroskeptic parties but a notable hold on the balance of power from centrists around the 28-member state bloc.
  • Wall Street futures suggest modest opening bell gains, following three consecutive weekly declines, ahead of house price data at 9:00 am Eastern and consumer confidence data at 10:00 am Eastern.

Market Snapshot

Global stocks drifted higher Tuesday, as investors in the U.S. and the U.K. returned from a three-day spring holiday, although caution still prevailed amid concern of the fate of trade talks between Washington and Beijing and the impact of the weekend's parliamentary elections in Europe.

President Donald Trump wrapped up a four-day state visit to Japan on Monday with a series of comments that suggested little progress in the U.S.-China trade dispute, telling reporters during a press conference with Prime Minister Shinzo Abe that he's "not ready to make a deal" with Beijing.

"I think sometime in the future China and the United States will absolutely have a great trade deal, and we look forward to that," Trump said, before repeating his incorrect assertion that China is responsible for paying tariffs on goods imported into the United States. "Because I don't believe that China can continue to pay these, really, hundreds of billions of dollars in tariffs. I don't believe they can do that."

However, despite threats of new, and "very, very substantial" levies on China imports from the President, China and Asia stocks booked solid gains Tuesday as investors bet on fresh stimulus from Beijing to prop up markets following consecutive months of dismal economic data. 

Wall Street futures, too, were showing signs of a positive start to the holiday-shortened week, following three consecutive weeks of losses,with contracts tied to the Dow Jones Industrial Average indicating a 73 point opening bell gain and those linked to the S&P 500, which is down just over 4% for the month, suggesting a 6 point bump to the downside.

Benchmark 10-year U.S. Treasury bond yields, however, continue to trade near October 2017 lows, and were marked at 2.29% during overnight trading as domestic and international investors continue to plow cash -- $6.4 billion alone last week, according to Bank of America Merrill Lynch data, compared to just $900 million for stocks -- into fixed income markets. 

European markets were little-changed at the start of trading Tuesday, following a thin trading session around the region Monday, but extended declines as international investors reacted to the weekend's Parliamentary elections that showed solid gains for pro-EU parties across several member states.

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Euroskeptic parities in France, Italy and the United Kingdom reaped a notable number of seats over the four-day vote, but with the U.K. set to leave the European Union in October, and with Green party candidates in Germany on the rise, centrists are still likely to hold the balance of power when the new Executive is established in November. 

The Stoxx 600 Europe bumped into the green by mid-day, however, while Italy's FTSE MIB slumped .054% amid concern that Deputy Prime Minister Matteo Salvini will push for a larger budge deficit following his party's win in Sunday's EU poll.

Shares in France's Renault and Italy's Fiat Chrysler Automobiles were both higher by mid-day, with the French carmarker rising 1.45% after the latter proposed a "transformative" €33 billion merger deal yesterday, with the French government signalling today that it would support under conditions that would protect national jobs and industrial sites.

Britain's FTSE 100 edged 0.4% higher by mid-day in London as the pound slipped to a five month low of 1.2670 following Sunday's European election results, which showed the most seats going to the newly-established Brexit Party, but the biggest share of the popular vote split among parties that wish to remain in the EU.

The divided outcome creates a complicated backdrop for the Conservative Party's leadership race, where no fewer than nine lawmakers have opted to seek the office of Prime Minister following Theresa May's resignation last week, with many political observers suggesting the prospect of fresh national elections if the party can't bridge the now solidified gap between Leave and Remain forces in Europe's second-largest economy.

Global oil pries were mixed at the start of U.S. trading, held down by a stronger U.S. dollar, rising domestic stockpiles and broader concerns over the strength of world demand now that China's economy is slowing precipitously and manufacturing activity in the United States slumped to a 10-year low last week.

Brent crude contracts for July delivery were marked 10 cents lower from from their Monday close to change hands at $70.01 per barrel while WTI contracts for the same month were seen 3 cents lower from their Thursday close in New York and changing hands at $59.10 per barrel.

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