Second front in U.S. trade war opens, first-quarter GDP due, and bears ready for Uber earnings. Here are some of the things people in markets are talking about today.
Ten months after President Donald Trump and European Commission President Jean-Claude Juncker agreed a tariff truce very little progress has been made in negotiating a trade deal between the U.S. and the European Union. Trump has been concentrating on his battle with China, while Europe has plenty of its own issues to deal with. In talks in Washington and Paris this month, the two sides again made little progress, leaving the path open for escalation. Speaking of the latter, China has put purchases of American soybeans on hold, bringing an end to so-called goodwill purchases, according to people familiar with the matter.
This morning’s first-quarter GDP report, due at 8:30 a.m. Eastern Time, may go some way towards helping the bond market decide whether its downturn signalling is on the right track. The Fed’s preferred inflation measure is published tomorrow morning, as economists continue to estimate the fallout from the trade war with China. In the Treasury market today, there has been no continuation of yesterday’s rally, with the 10-year U.S. yield holding at 2.266%.
It is a busy day in earnings today, with Uber Technologies Inc. likely to be a focus for investors who have been busy shorting the stock in the wake of the company’s disappointing IPO. Costco Wholesale Corp., Dell Technologies Inc., The Gap Inc. and Dollar General Corp. also report later amid what continues to be a dismal earnings season for retailers.
Overnight, the MSCI Asia Pacific Index slipped 0.1%, while Japan’s Topix index closed 0.3% lower, recovering much of its early session losses while still ending at the lowest level since January. In Europe, the Stoxx 600 Index was 0.4% higher at 5:50 a.m. in a relatively quiet session with banks among the best performers. S&P 500 futures pointed to a small rebound at the open and gold was lower.
It’s Thursday, so weekly jobless claims are due at 8:30 a.m., with a small rise to 214,000 expected. Wholesale inventories, as well as GDP are also published at that time. Pending home sales numbers for April are released at 10:00 a.m. Fed Vice Chairman Richard Clarida speaks in New York at noon. German Chancellor Angela Merkel gives this year’s Harvard commencement speech.