Nov 23, 2018, by Lorcan Roche Kelly
President Donald Trump said that he’s been preparing “all my life” for talks with Chinese leader Xi Jinping at next week’s Group of 20 summit in Argentina. China’s Vice Minister of Commerce Wang Shouwen said that trade teams from both sides “have been in close touch” ahead of the meeting. Tensions remain high, with the U.S. moving forward with plans to restrict technology exports to China, and analysts say there is a less than a 50-50 chance of a breakthrough at the gathering. Elsewhere in U.S. foreign relations, Trump yesterday said that he had signed an order to close the border with Mexico and authorized the use of lethal force against migrants who attempt to enter the country.
A barrel of West Texas Intermediate for January delivery plunged more than 5 percent to trade below $52 a barrel by 5:40 a.m. after Saudi Arabia indicated that its output may have reached a record. This added to concerns over a global supply glut amid growing U.S. crude stockpiles. For chart watchers, the selloff has seen oil prices fall below technical support levels which implies further losses may be imminent.
A composite purchasing managers index for the euro area fell to the lowest level in four years, dropping to 52.4 in November, in a further blow to expectations for a pickup following the summer slowdown. The performance of Germany, the region’s largest economy, was particularly disappointing with composite PMI coming in at 52.2 for the month, below all estimates in a Bloomberg survey of economists. This came after official data confirmed the country suffered its first contraction since 2015 in the third quarter. Markit U.S. manufacturing, service and composite PMIs are due at 9:45 a.m. Eastern Time.
Overnight, the MSCI Asia Pacific ex-Japan Index slid 0.3 percent with U.S. warnings against using Huawei Technologies Co. equipment hitting tech stocks in China. Japan is closed for a holiday. In Europe, the Stoxx 600 Index was 0.2 percent higher at 5:40 a.m. as oil’s fall weighed on the regional gauge. S&P 500 futures pointed to a slightly lower open for the shortened trading day, the 10-year Treasury yield was at 3.052 percent and gold fell.
The biggest annual shopping day in the U.S. has got off to a strong start, with spending expected to exceed $1.1 trillion over the holiday period, according to a forecast from Deloitte. Online shopping has ramped up this month, with spending in the first 20 days of November almost 17 percent ahead of last year’s pace. Brian Cornell, chief executive officer of Target Corp., has said that the industry is enjoying possibly the strongest environment he’s seen in his 37-year career.