The Markets Before Opening on Monday
The New York Stock Exchange points to a lower opening on Monday morning, concerned about the Chinese trade surplus fueling fears of a slowdown in the world’s second largest economy and cautious pending the Brexit epilogue and corporate earnings US.
On the futures side, the Dow Jones Industrial Average, the leading index of the New York public prosecutor, is down 0.85% to 23,747 points according to futures contracts. The Nasdaq, with strong technological coloration, fell by 1.09%, to 6540 points. The S & P500, meanwhile, loses 0.85% to 2573 points.
Wall Street ended in a small dip on Friday, with investors trailing after five rounds of hikes, pending the start of the earnings season.
China’s foreign trade figures in December “worsened while the global economic situation is becoming increasingly worrying,” says Michael Hewson, at CMC Markets.
For the second year in a row, China’s trade surplus declined overall in 2018, except vis-a-vis the United States. China’s exports to the United States rose 11.3 percent, and imports rose only 0.7 percent last year.
Beijing and Washington have taken reprisals against one another, through tariff increases, until they declare a truce of three months in early December to try to resolve their differences by negotiation. that of the commercial imbalance.
China will focus on easing trade tensions with the United States this year, its trade minister told the official press following recent talks with US negotiators.
“This week’s start will be further punctuated by the first results releases in the US, by the continuation of the ‘shutdown’ and by the vote in Westminter of the exit agreement negotiated by Theresa May and her government,” say for their share the analysts of the broker Aurel BGC.
“Europe is not going to offer investors reason to celebrate this week”, an end to the chaos of Brexit is not in sight, says his side Jasper Lawler, an analyst at London Capital Group.
Prime Minister Theresa May will once again urge MEPs on Monday to approve his agreement Brexit very largely conspired, on pain of plunging the United Kingdom in a “catastrophic” situation on the eve of a crucial vote in Parliament.
Chinese stock markets ended Monday lower, affected by the decline in Chinese foreign trade in December and the sharp slowdown in exports over the year, fruit of a sluggish economy and the customs dispute with Washington.
These declines follow the decline of major Wall Street indices on Friday, after five consecutive rises driven by a renewed optimism on the trade dispute between China and the United States and the “patience” announced by the Fed on a new rising rates.
“Optimism around US-China trade relations is fading,” said Sukrit Vijayakar of Trifecta Consultants.
Chinese foreign trade figures released Monday did not help. For the second year in a row, China’s trade surplus narrowed in 2018, confirming the slowdown in the world’s second largest economy.
But, on the one hand, the surplus has worsened vis-à-vis the United States, at the risk of further displeasing Washington, which is pushing for a rebalancing.
And, on the other hand, the December figures are ominous for 2019: Chinese exports fell by 4.4% and imports by 7.6%, reflecting a weakening domestic demand.
“These weaker Chinese indicators than expected for 2018 have pulled the markets down,” said Stephen Innes, an analyst at OANDA.
The partial paralysis of the US federal administrations is to be watched today. It broke a longevity record, surpassing the 21-day shutdown during the Bill Clinton era in 1995-96.