The Tuesday Market Minute
- Global stocks edge back towards multi-year highs ahead of key speech on trade later today from President Donald Trump.
- Trump will address the Economic Club of New York at noon Eastern time, with investors focused on comments linked to tariffs on China-made goods and European autos.
- European shares rise on trade hopes, while stronger-than-expected results from Infineon lifts the region's tech sector.
- US equity futures suggest modest opening bell gains on Wall Street ahead of earnings from CBS, Hewlett Packard, Tyson Foods and DR Horton.
U.S. equity futures edged higher Tuesday, while global stocks traded firmly in positive territory, as investors awaited a key speech from President Donald Trump that could define his administration's position on U.S.-China trade talks and a long-simmering dispute over auto tariffs with the EU.
Trump will address the Economic Club of New York in Manhattan amid speculation he could signal a willingness to roll back tariffs on China-made goods and possibly announce a delay on proposed levies on European-made cars for another six months.
White House spokesman Judd Deere, however, would only say that investors can "expect the president to highlight how his policies of lower taxes, deregulation, and fair and reciprocal trade have supported the longest economic recovery in U.S. history with record low unemployment, rising wages, and soaring consumer confidence" from the President's noon Eastern time speech.
Trade remains unquestionably the biggest market concern at present, and any suggestion that tariffs could be lifted or delayed could help stocks reach fresh all-time highs between now and the end of the year as the underpinning of low interest rates, a solid domestic economy and stronger-than-expected corporate earnings continues to drive equity market gains.
Against that backdrop, Wall Street futures suggest modest opening bell gains Tuesday amid another thin earnings and economic data release calendar, with contracts tied to the Dow Jones Industrial Average indicating a 30 point gain and those linked to the S&P 500 guiding for a 3 point bump for the broader benchmark.
European stocks were also on the rise Tuesday, pulling the Stoxx 600 benchmark back towards its recent four-year high, as investors cheered the prospect of delays to EU auto tariffs and reacted to stronger-than-expected third quarter earnings from Infineon AG (IFNNY) , Europe's biggest tech company and a key barometer for the region's semiconductor sector.
A surprise reading of investor sentiment in Germany, Europe's biggest economy, helped stocks further after the ZEW's closely-watched survey jumped nearly 23 points to a -2.1 point tally.
The Stoxx 600 gained 0.3%by mid-day trading in Frankfurt, led to the upside by auto and basic resource stocks, while Britain's FTSE 100 was marked 0.36% higher by late morning in London.
Asia stocks were also solid, although China shares tested two-month lows earlier in the session after data showed new bank loans fell to the weakest pace in nearly two years last month, suggesting softening consumer and investment demand in the world's second largest economy.
A late-session rebound, however, lifted the MSCI ex-Japan benchmark to a 0.51% gain, while Japan's Nikkei 225 ended the session 0.81% higher, and close to its 13-month peak, at 23,520.01 points.
Away from equities, benchmark 10-year U.S. Treasury bonds were active in overnight trading as investors squared positions ahead of the re-opening of bond markets on Tuesday following the Veteran's Day closure, with yields falling to 1.91% before retreated to around 1.9455 amid the improving equity market sentiment.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.1% higher at 98.27 while the pound held near six months highs of 1.2852 against the dollar after a key Brexit-supporting political party agreed not to stand against Conservative Party lawmakers in next month's general election, a move that provides a major boost to Prime Minister Boris Johnson.
Global oil prices were also modestly higher, despite the U.S. dollar strength, ahead of data from the American Petroleum Institute later today that is expected to show a decline in domestic crude stocks.
Brent crude contracts for January delivery, the global benchmark, were seen 43 cents higher from their Monday close and trading at $62.61 per barrel, while WTI contracts for December were marked 32 cents higher at $57.18 per barrel.