Equity markets around the globe are seeing a bit of pressure heading into the morning. Most major benchmarks, including the DAX and Nikkei, have lost about 0.5%. The Hang Seng is down 1.7% and emerging markets continue to weigh on global sentiment.
Next week, the ECB will hold its monetary policy meeting. The bank was expected to start winding down its stimulus program at the end of 2018. However, Italian turmoil led some analysts to think that the ECB will remain cautious. Will the ECB withstand the pressure or funk? And what does it all mean for the gold market?
Gold, silver, and mining stocks moved higher once again yesterday and the former even managed to move above the declining trend channel. Breakouts are bullish and thus the outlook for gold improved significantly… Or did it? Gold’s price in terms of the euro and gold’s relative performance to silver and mining stocks make replying to the above question quite easily.
Major U.S. benchmarks grinded forward in the second half yesterday and added gains overnight. Buzz that China offered to add $25 billion in purchases of U.S. goods this year turned a potentially dulling tape back north before the close. The offer comes days after Commerce Secretary Wilbur Ross left Beijing but also surfaces question marks to the $70 billion in purchases spoken of weeks ago.
Investors should buckle up for a potential showdown as trade is expected to be a major talking point throughout the summit. With escalating trade tensions seen as a significant threat to global economic growth, this could be a G7 meeting like no other.
Major U.S. benchmarks are holding Monday’s gains and then some this morning after the Nasdaq Composite closed at a record high to start the week. Europe is leading this morning, the DAX is + 0.8% while Asia is muted. Traders want to keep an eye on Europe as Italy’s new PM Conte faces a bit of a confidence vote, though the coalition that appointed him has a majority.
Despite a slower start, the S&P 500 followed trading up to resistance at 2744-2745.25 and the highest level since March 19. Here, Friday morning, we discussed the increasing likeliness that Nonfarm Payroll would be beneficial to stocks and that is exactly how a strong report played out; Average Hourly earnings and job growth both topped expectations at +0.3% and 223k respectively. Benchmarks around the globe are higher this morning with Asia leading the way; the Nikkei is +1.37% and the Hang Seng +1.66%.
This has certainly been a rollercoaster trading week for financial markets thanks to geopolitical uncertainty and renewed trade war fears. Easing political tensions in Italy have rekindled risk appetite, ultimately resulting in global equity markets venturing higher.