Archives of “September 4, 2019” day

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Solid up day for the European stock indices today

  
Analysis, Global Indices
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Major indices are all in the black

The major European stock indices are ending the day with solid gains, helped by decreased attention in Hong Kong, increasing hope for US/China relations, less no-deal risk for the UK, and more dovish Fed officials (the ECB is set to act in September too).
The provisional closes are showing:
  • German DAX, +0.94%
  • France’s CAC, +1.21%
  • UK’s FTSE, +0.60%
  • Spains Ibex, +0.61%
  • Italy’s FTSE MIB, +1.58%
In the benchmark 10 year note sector in Europe, yields are higher as well (with the exception of Italy).
Major indices are all in the blackIn other markets as London/European traders look to exit:
  • spot gold is near unchanged at $1547. The high price reached $1550.23. The low extended to $1533.93
  • WTI crude oil futures are up $2.25 or 4.17% at $56.17. That is near the high price for the day at $56.22. The US impose tighter sanctions on Iran today.
In the US stock market major indices are enjoying solid gains as well.  A snapshot of the market currently shows:
  • S&P index 27 points or 0.93% at 2933.22
  • NASDAQ composite index is up 84 points or 1.07% at 7958.13
  • Dow Jones industrial average is up 212 points or 0.81% at 26329.70
US yields have come off high levels and trade mixed with the longer and up marginally and the shorter end unchanged or down marginally:
US yields are trading mixedA snapshot of the forex market shows that the GBP is still the strongest of the majors (but off earlier higher levels). The JPY and USD remain the weakest.  The CAD  has gotten stronger on stronger oil and a was dovish Bank of Canada statement.

Oil jumps 4% on better sentiment and tighter Iran sanctions

  
Analysis, Crude

Sanctions in play and WTI up $2.21 to $56.15

Sanctions in play and WTI up $2.21 to $56.15
Reports from Iran suggest leaders will scale back its commitments to the 2015 nuclear deal within hours.
That comes a short time after the US announced a fresh round of sanctions  and promises to do more. The aim is to bring Iran oil exports to zero.
Technically, even with the big jump today we’re still within the range of the two prior trading sessions. Beyond that, the trend towards consolidation has been ongoing for more than a month with oil locked in a $53-57 range.
That’s similar of the ‘box’ in the S&P 500 and suggests both could break out at the same time and could confirm one another.

Trump on thinner political ice than Xi in trade war

  
Analysis, Politics

The latest round of tit-for-tat tariffs between the U.S. and China has expanded the dimensions of their trade war, and the lopsided totals of goods affected give the impression that Donald Trump has the upper hand over his counterpart Xi Jinping.

Domestic politics, however, make the U.S. president’s position a lot dicier than it looks.

The Trump administration on Sunday slapped a fourth round of punitive tariffs on a broad range of Chinese goods, including household electric appliances and clothes. This provoked China to counter with its own customs duties on farm products and other imports from the U.S., further widening a conflict that is beginning to impact the world economy.

The opening salvos had come in July 2018, when Trump imposed 25% additional tariffs on $34 billion worth of Chinese imports, including industrial machinery, out of the roughly $550 billion worth of products the U.S. buys from China every year. Washington launched a second barrage the following month, targeting another $16 billion worth of imports, and escalated its attacks that September by adding $200 billion in goods to the list.

The latest and fourth batch of U.S. tariffs increased the total by $110 billion to $360 billion. (more…)

Hong Kong chief executive to withdraw extradition bill: reports

  
Analysis, Politics
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Hong Kong Chief Executive Carrie Lam will formally withdraw a controversial extradition bill, which has been at the center of massive demonstrations this summer and is one of protesters’ five demands, multiple local media reported on Wednesday.

The South China Morning Post said that Lam will meet with pro-establishment allies on Wednesday afternoon at her official residence. Citing sources, the SCMP said that all 43 pro-establishment lawmakers on Tuesday night had been invited to meet with Lam.

Formal withdrawal of the legislation is one of five demands made by protesters. The others are Lam’s resignation and introduction of universal suffrage, rescinding the characterization of protesters as rioters, unconditional release of arrested demonstrators, and creation of an independent commission to investigate complaints of excessive use of force by the police.

While acceding to one demand would be viewed as an olive branch by Lam, protesters have said that they would not settle for anything less than the agreement of all five.

Michael Tien Puk-sun, a pro-Beijing lawmaker in Hong Kong’s Legislative Council, told reporters on Wednesday that the withdrawal of the bill would not be enough and “comes too late” to resolve the monthslong standoff. (more…)

Eurozone August final services PMI 53.5 vs 53.4 prelim

  
Analysis, Economy

Latest data released by Markit – 4 September 2019

  • Composite PMI 51.9 vs 51.8 prelim
Preliminary figures can be found here. The slight upward revisions were preempted by the earlier French and German readings and this just reaffirms the divergence still seen in the Eurozone economy as a whole.
While the services sector is still seen holding up decently, the manufacturing sector continues to experience a downturn and that is leaving for sluggish growth conditions in Q3 – and likely to extend towards Q4 as well.

Fed Bullard says a 50bp cut would align the Federal Reserve with market expectations

  
  Analysis
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Bullard is president of the Federal Reserve Bank of St. Louis

  • Bullard says current Fed policy rate “too high,” would be better to get to “the right point” now rather than in smaller steps
  •  “aggressive” action needed given dive in US bond yields, impact of trade war
  • calls trade debate a “reckoning” for the current world trading system that could take a long time to sort out
B speaking in an interview, headlines via Reuters
Bullard is president of the Federal Reserve Bank of St. LouisYeah, hi

US stocks opened lower and closed lower

  
Analysis, US Market
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…but off lows for the day

The US major stock indices opened lower and closed lower. The low for the Dow reached -1.61%. For the Nasdaq it reached -1.45%. For the S&P it fell by as much as -1.18%.  However, the indices did recover some of those declines by the close.
The final numbers are showing:
  • The S&P fell -20.02 points or -0.69% at 2906.27
  • The Nasdaq fell -88.72 points or -1.11% at 7874.16
  • The Dow fell -285.26 points or -1.08% at 26118
Below are the % ranges for the North American and European markets for the day.  All major indices are ending lower.
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