The Monday Market Minute

  • Global stocks weakened Monday, with holiday-thinned markets in Asia leading declines, as both China and OPEC round on President Donald Trump's 'bully" tactics on trade and energy.
  • U.S. and China tariffs kick-in today, with Beijing accusing Washington of attempting to impose its will on with world through "extreme pressure."
  • Oil rises to a four-year high after OPEC keeps its production quotas in place despite pressure from Trump to "get prices down now".
  • Sky shares surge to record high after Comcast wins $40 billion bidding war for Europe's biggest pay-TV group as shareholders weigh £17.28 per share bid.
  • U.S. futures indicate a modest pullback on Wall Street, with the Dow poised for a 55-point decline heading into the final days of a record-setting third quarter.

Market Snapshot

Global stocks weakened Monday, while oil prices surged to a four-year high, as investors reacted sharply-worded attacks on President Donald Trump's trade and energy policies from leaders of the world's second-largest economy and its biggest oil producing cartel. 

OPEC got the ball rolling Sunday when it decided to make no changes to output quotas at its weekend meeting in Algeria, with Saudi Arabia's energy minister insisting that the global oil market is "balanced and that he "doesn't influence prices", a clear reference to President Trump's Tweet last week demanding the cartel "get prices down now!". 

Iran's oil minister called the OPEC decision, which lifted Brent crude futures past $80 a barrel, "the biggest insult to Washington's allies in the middle east" and suggested global producers were ready to deal with looming U.S. sanctions on the sale of Iranian crude, which take effect over the first week of November and are expected to take between 1.5 million and 2.0 million barrels of oil from the market each day.

Both Brent and WTI crude prices trader sharply higher in the overnight session following the OPEC meeting, with Brent contracts for November delivery rising $1.91 per barrel to $80.71, the highest since November 2014, and WTI futures for the same month gaining $1.21 to trade at $71.99 per barrel.

China followed suit late Sunday with a detailed report on the nature of tariffs and trade, just hours after levies on $260 billion worth of goods from both Washington and Beijing took effect Monday, and an accusation that the U.S. was using "bully" tactics to impose its economic will on the rest of the world.

China said the U.S. has "brazenly preached unilateralism, protectionism and economic hegemony, making false accusations against many countries and regions, particularly China, intimidating other countries through economic measures such as imposing tariffs, and attempting to impose its own interests on China through extreme pressure," according to the government white paper quoted in the state-run Global Times.

A series of holidays in the Asia, which kept markets in China, Japan and South Korea closed for the session, limited trading on other benchmarks in the region and pushed the MSCI Asia ex-Japan index 0.9% lower heading into the final hours of dealing. 

Early indications from U.S. equity futures suggest the bearish sentiment will bleed onto Wall Street Monday, with contracts tied to the Dow Jones Industrial Average suggesting an 45 point opening bell decline while those linked to the S&P 500 indicating an 4.5 point pullback for the broader benchmark. Nasdaq Composite futures were marked 28.5 points lower from their Friday close. 

European stocks were also weaker at the start of trading in the final week of the third quarter, with the Stoxx 600 falling 0.29% to 383.18 points by mid-day in Frankfurt, led to the downside by a 0.4% pullback for the DAX performance index and a 0.21% decline for the CAC-40.

Britain's FTSE 100 was marked 0.17% lower in the opening minutes of trading as the pound inched modestly higher against the dollar to change hands at 1.3010.

Sky Plc (SKYAY) shares were a notable early mover on the benchmark, rising 9% to trade at £17.24 each following Saturday's sealed-bidding auction which saw Comcast Corp. (CMCSA) top rivals Walt Disney Co. (DIS) and 21st Century Fox (FOXA) for the right to buy the outstanding shares of Europe's biggest pay-TV broadcaster in a deal that values the group at just under $40 billion. Comcast was marked 5% lower at $35.90 each.

Rangold Resources  (GOLD)  was also on the move, rising 6.1% to £52.24 after it agreed to an $18.3 billion all-share merger with Canada's Barrick Gold Corp (ABX) that will create a global mining giant that controls five of the world's ten biggest bullion deposits. Barrick shares were marked 3.9% higher in pre-market trading in New York at $10.88, a move which would trim its year-to-date decline to around 23%.

Sirius XM Holdings Inc. (SIRI) agreed to buy music-streaming service Pandora Media (P) for $3.5 billion in an all-share deal that marks yet another shakeup in the U.S. media and entertainment sector.

Pandora shares surged 10% in pre-market trading Monday following news of the deal, indicating an opening bell price of $10.03 each, a move that would take the stock to its highest level in 16 months and extend its year-to-date gain past 110%. Sirius shares were seen marginally higher at $6.99 each and have risen some 30% so far this year.

Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked modestly higher from its Friday levels at 94.22 while benchmark 10-year bond yields were holding at 3.078% ahead of the Federal Reserve's two-day rate setting meeting which beings Tuesday in Washington.

The CME Group's FedWatch tool is pricing in a 94.8% chance of a rate hike Wednesday, a decision which would take the key rate to a range of 2% to 2.25%. 

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