The Friday Market Minute

  • Global stocks mixed as investors await the start of the G20 summit in Argentina and crucial trade talks between Presidents Donald Trump and Xi Jinping.
  • Asia stocks mixed as China manufacturing weakens, officials urge "fair-minded" approach with Washington.
  • Oil markets edge higher as investors await both G20 headlines on Russia/Saudi meeting on production cuts and OPEC summit next week in Vienna
  • U.S. equity futures point to modest opening bell gains as Fed minutes paint mixed picture on 2019 rates even as they cement case for December hike.

Market Snapshot

Global stocks traded lower Friday as investors around the world kept a nervous eye on the start of the G20 summit in Argentina and prepped for the scheduled showdown between Presidents Donald Trump and Xi Jingping that could end or intensive the ongoing trade war between the world's two biggest economies.

Trump, for his part, told reporters in Washington Thursday that he was "very close" to doing a deal with China, but doesn't know if he wants to, adding to the broader market concern that the two sides are further apart on major trade issues than many had anticipated.

Arrived in Argentina with a very busy two days planned. Important meetings scheduled throughout. Our great Country is extremely well represented. Will be very productive!

— Donald J. Trump (@realDonaldTrump) November 30, 2018

That concern was amplified by the fact that Peter Navarro, a noted hawk on China trade who has clashed with Trump's team in the past, will attend both the G20 summit and the Saturday dinner that Trump and Xi had scheduled earlier this week. 

The 11th-hour addition of Navarro to the Trump side could change the tone and complexion of the talks, particularly given the fact that China has insisted on being treated as an equal to the United States if its going to cede to any major changes that reduces its annual $375 billion trade deficit.

"Beijing wants a deal, just as Washington does. And it is willing to cooperate with Washington in dealing with concerns about trade if they are fair-minded," the state-run China Daily newspaper said Friday. "Should there be any other aspirations, such as taking advantage of the trade spat to throttle Chinese growth, then an agreement is unlikely to be reached."

Trading in Asia reflected a portion of that concern, but also the fact that official data from China's National Bureau of Statistics showed activity in the country's manufacturing sector eased to the slowest pace in 28 months in November, and sits precariously on the edge of contraction just as tariffs on U.S. imports are expected to jump to 25% on January 1.

The MSCI ex-Japan benchmark slipped 0.24% into the final hours of trading while Japan's Nikkei 225 rode a weaker yen to a modest 0.4% gain by the close of the session in Tokyo.

Early indications from U.S. equity futures suggest similar caution on Wall Street, with contracts tied to the Dow Jones Industrial Average indicating a 60 point decline and those linked to the S&P 500 guiding for a 5.8 bump to the downside for the broader benchmark.

Trading on European markets had a similarly cautious tone, with investors opting not to extend risk positions ahead of this weekend's summit and after a hectic week of Brexit, interest rate, Italian budget and German banking headlines.

The region-side Stoxx 600 was marked 0.42% to the downside in the opening hour of trading in Frankfurt while Britain's FTSE 100 fell 0.6s% into the red by mid-morning in London.

The U.S. dollar index, which tracks the greenback against a basket of six currency peers, was modestly higher at 96.79 after minutes from the Federal Reserve's November meeting showed policymakers were settled on a December rate hike, but appeared more open to altering their policy path into 2019 depending on data from the broader economy. 

Global oil prices were also edging marginally higher in early trading, but reversed gains ahead of the G20 summit during which energy ministers from Russia and Saudi Arabia are expected to discuss production cuts that, if shared between OPEC members and Moscow, would remove around 1.4 million barrels from the market each day. OPEC leaders will meet next week in Vienna to formalize any agreement that might be reached this weekend in Buenos Aires.

Brent crude contracts for January delivery, the global benchmark, were seen 60 cents lower from their Thursday close in New York and changing hands at $58.93 per barrel while WTI contracts for the same month, which are more tightly liked to U.S gas prices, were marked 76 cents lower at $50.69 per barrel.