Nov 13, 2018, by Lorcan Roche Kelly
At the table
U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He have resumed trade talks ahead of a meeting between the countries’ leaders at the G-20 gathering in Argentina at the end of this month. They spoke by phone on Friday and the South China Morning Post reported Tuesday that Liu was “expected” to visit Washington shortly. While the news has been enough to lift global shares from the worst of the selloff, there are still more risks facing trade with reports yesterday suggesting the White House is looking at imposing tariffs on automobile imports to protect national security.
Hopes for a reversal in oil continue to be frustrated after yesterday’s bounce proved short-lived. A barrel of West Texas Intermediate for December delivery traded at $58.50 by 5:45 a.m. Eastern Time, with crude now headed for its 12th consecutive losing session, the longest on record. The latest leg down came after President Donald Trump took aim at Saudi Arabia’s plan to cut production, saying that prices need to fall on supply.
In the tech market right now it there seems to be a case of Apple Inc. sneezing and all of its suppliers catching a cold. Major producers of components for the company’s flagship iPhone saw their shares drop in Asian trading as concerns over weak demand mounted. Lumentum Holdings Inc. plunged 33 percent yesterday after cutting forecasts when a client– presumed to be Apple – asked them to reduce shipments of the facial recognition lasers used by smartphones. Shares in Apple itself were also hit on Monday and are flat in pre-market trading.
Overnight the MSCI Asia Pacific Index dropped 1 percent while Japan’s Topix index closed 2 percent lower, finishing well off the lows of the session as the trade talk news helped temper the worst of the tech selloff. In Europe the Stoxx 600 Index was 0.3 percent higher as investors held onto hopes on trade and airlines rallied on falling oil prices. S&P 500 futures pointed to a higher open, the 10-year Treasury yield was at 3.162 percent and gold was lower.
It’s a fairly quiet day for economic data today, with October NFIB small business optimism due at 6:00 a.m. and the monthly budget statement at 2:00 p.m. However, there is plenty for Fed watches to keep an eye on with Minneapolis Fed President Neel Kashkari, Fed Governor Lael Brainard and Philadelphia Fed President Patrick Harker all due to speak later. In earnings, The Home Depot Inc. and Tyson Foods Inc. both announce results.