Equity markets struggle as trade tensions weigh – Binary Options Daily Review

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Markets Report

Tuesday 19th June 2018
Prepared by Barry Jenkins, MarketsWorld Binary Options Analyst

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Market Index Closing Level Move on day Intraday Market Range
CAC 5,450.48 – 51.40 5,418.48 – 5,491.84
DAX 12,834.11 – 176.44

12,784.50 – 12,982.90

Dow Jones 24,987.47 – 103.01 24,825.77 – 25,003.10
FTSE 7,631.33 – 2.58 7,601.60 – 7,645.47
IBEX 9,769.40 – 81.60 9,717.00 – 9,859.50

Closing Markets Summary

Dow Jones

U.S. stock indexes ended the session mostly lower on Monday, though the major indexes ended well off their lows and the Nasdaq managed to finish just in positive territory as investors once again looked past the issues of trade-policy tensions to focus on positive underlying fundamentals. Markets were still focusing on the escalating trade spat between the U.S. and China. President Donald Trump on Friday announced tariffs on $50 billion worth of Chinese imports, and Beijing retaliated by targeting high-value American exports. However these developments are being viewed as opening negotiation salvos, as opposed to a prelude to more punitive measures coming from both sides. Economic data reported by the National Association of Home Builders’ showed the monthly confidence index fell two points to 68 in June, in part due to rising lumber costs. Companies that featured included Tesla Inc. which rose 3.2% after CEO Elon Musk showed off the electric-car maker’s newest production line in a weekend tweet. He also predicted that those who are short on Tesla have about three weeks before their short position explodes.” Valeant Pharmaceuticals International Inc. fell 10.5% after the Food and Drug Administration failed to approve a lotion product intended to treat plaque psoriasis. U.S.-listed shares of Chinese e-commerce retailer JD.com Inc. rose 0.3% after Google invested $550 million in the company. Google is a division of Alphabet Inc. Solid Biosciences Inc. rose 3.4% after the Food and Drug Administration lifted its clinical hold on the company’s treatment for Duchenne muscular dystrophy, allowing a Phase 1/11 trial to resume. Ziopharm Oncology Inc. fell 19% after the Food and Drug Administration placed a clinical hold on a Phase 1 trial of a treatment for cancer. The Dow Jones closed down 103.01 points at 24,987.47, dropping for a fifth straight session. The S&P 500 closed down 5.79 points at 2,773.87. The Nasdaq Composite closed up 0.65 of a point at 7,747.03.

Europe

European equity markets closed lower Monday, as Angela Merkel’s tenure as Germany’s chancellor came under threat and as the trade conflict between the U.S. and China remained in focus. The Pan-European Stoxx Europe 600 index closed down 0.8% at 385.91, adding to the 1% loss seen on Friday. The euro was lower against the dollar with the EUR/USD dipping to 1.1606 from 1.1609 late Friday in New York. Investors were still monitoring the trade tensions which were still in the spotlight after China announced plans for retaliatory tariffs on U.S. goods worth $34 billion, including soybeans, whiskey and electric cars. Beijing’s move comes after U.S. President Donald Trump last week approved a first round of levies on about $50 billion in Chinese products and reportedly was drawing up a list for a second wave of tariffs against China. In Europe, Merkel’s fragile coalition was under pressure over migrant issues, prompting increasing concerns that the government could falter. The German chancellor has been handed a two-week ultimatum by her coalition partners to secure a deal on migrants with the country’s European neighbours, a move that buys her time to settle a crisis threatening to topple her government. Companies that featured included Indivior PLC which rose 1.6% after the U.K. pharmaceutical company said it has been successful in temporarily blocking the launch of a generic alternative to its Suboxone opioid disorder medication through the courts. Engie SA fell 4.8% after the French energy company said it expects an adjustment for three nuclear units to cause a 250 million-euro hit in its 2018 earnings. Virgin Money Holdings PLC fell 2.2% after the British lender accepted a £1.7 billion all-share takeover offer from CYBG PLC the parent of British lenders Clydesdale Bank and Yorkshire Bank. Shares of CYBG were down 0.7%. On regional markets the French CAC closed down 51.40 points at 5,450.48, the German DAX closed down 176.44 points at 12,834.11 and the Spanish IBEX closed down 81.60 points at 9,769.40.

FTSE

The FTSE 100 closed slightly lower on Monday, tracking downbeat sentiment across Europe, where fears of an escalating trade conflict between the U.S. and China and political uncertainty in Germany helped weighed on markets. The pound moved lower against the dollar with the GBP/USD declining to 1.3247, down from 1.3280 late Friday in New York. Trade tensions remained at the front of investors minds after China announced plans for retaliatory tariffs on U.S. goods worth $34 billion, including soybeans, whiskey and electric cars. Beijing’s move comes after U.S. President Donald Trump last week approved a first round of levies on about $50 billion in Chinese products and reportedly was drawing up a list for a second wave of tariffs against China. In Europe, German Chancellor Angela Merkel’s fragile coalition was under pressure over migrant issues, prompting increasing concerns that the government could falter. Merkel’s Bavarian allies, the Christian Social Union, will reportedly decide on Monday whether to defy the chancellor on her immigration policies, which the CSU believes are too soft. Companies that featured included DS Smith PLC which fell 2.5% after the packaging company released full-year results. Virgin Money Holdings PLC slipped 2.2% after the British lender accepted a £1.7 billion all-share takeover offer from CYBG PLC the parent of British lenders Clydesdale Bank and Yorkshire Bank. Shares in CYBG were down 0.7%. The FTSE 100 closed down 2.58 points at 7,631.33.

Economic News Expected Today

 USA

Type Period Forecast Previous Importance
FOMC Member Bullard Speaks June     Medium
Building Permits May -1.4% m/m; 1.350M -1.8% m/m; 1.364M High
Housing Starts May 1.4% m/m; 1.317M -3.7% m/m; 1.287M Medium
Redbook June   -0.2% m/m Low

Economic News Expected Today

EU  Eurozone

Type Period Forecast Previous Importance
Current Account (euro zone) April 30.3B 32.0B Low
ECB President Draghi Speaks (euro zone) June     High
ECB’s Praet Speaks (euro zone) June     Medium

Economic News Expected Today

UK United Kingdom

Type Period Forecast Previous Importance
No Data        

Other Global Economic Data Expected

 

Type Period Forecast Previous Importance
RBA Meeting Minutes (Australia) June     High
SECO Economic Forecasts (Switzerland) June     Low

Economic News Round Up MarketsWorld Bars

Britain’s economy is on track to grow at its weakest rate since 2009 this year due to Brexit uncertainties, higher oil prices and fears of a trade war. The British Chambers of Commerce cut its 2018 growth forecast to 1.3 percent from 1.4 percent and also cut its outlook for 2019 to 1.4 percent.

Forex Round Up MarketsWorld Bars

The U.S. dollar dropped against the yen on Monday as heightened trade tensions between the U.S. and China hit market sentiment, bolstering safe haven demand for the Japanese currency. The USD/JPY was down 0.23% to 110.40, pulling away from Friday’s three-week highs of 110.90. Market sentiment deteriorated as China’s retaliatory action against trade tariffs imposed by the Trump administration reignited fears of a possible trade war between the world’s two largest economies. The euro was little changed against the dollar, with the EUR/USD at 1.1603, up from an earlier low of 1.1565. The pound was lower against the dollar, with GBP/USD down 0.29% at 1.3238 after the British Chambers of Commerce downgraded its growth forecast for the UK as uncertainty over Brexit and fears of a global trade war hit confidence. The U.S. dollar index was up 0.06% at 94.50, holding below Friday’s eleven-month high of 95.13.

 
Commodity Round Up MarketsWorld Bars

Gold prices were modestly higher on Monday as the U.S. dollar remained flat against its rivals and rising U.S.-China trade tensions fuelled investor appetite for safe-haven gold. Gold futures for August delivery rose by $1.50 to $1,280.20 a troy ounce. silver futures fell 0.06% to $16.47 an ounce.

Crude oil prices settled higher on Monday as the market reacted to a report suggesting the Organization of the Petroleum Exporting Countries was considering an output hike well below levels many had initially feared. West Texas Intermediate crude futures for July delivery rose 1.2% to settle at $65.85 a barrel. Brent rose 2.2% to trade at $75.08 a barrel.

The MarketsWorld Overview MarketsWorld Bars

In the U.S building permits reached a level of 1.36 million annualized units in April and is now forecast to tick down to 1.35 million. Housing starts stood at 1.29 million and are forecast to advance to 1.31 million in May. For the data to get a meaningful reaction in the market both figures would need to go in the same direction.

 

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The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Any opinion offered herein reflects Barry Jenkins’ (MarketsWorld Analyst) current judgment and may change without notice. Users acknowledge and agree to the fact that, by its very nature, any investment in shares, stock options and similar and assimilated products is characterized by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable. This message is intended for recipient only and not for further distribution without the consent of MarketsWorld.

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