Global Stocks Waver as Investors Read Shifting Trade Talk Cues
November 21 2019 - 07:55AM
Dow Jones News
By Anna Isaac and Caitlin Ostroff
Global stocks wavered Thursday as investors assessed conflicting
signals on the prospects for the U.S.-China trade talks.
Futures tied to the Dow Jones Industrial Average swung between
tepid gains and losses, a day after the gauge of U.S. blue-chip
stocks logged its biggest fall of the month. Hong Kong's benchmark
Hang Seng Index ended the day down 1.6%, while the pan-continental
Stoxx Europe 600 index retreated 0.5%, led by losses in sectors
most exposed to the global economic impact of worsening trade
tensions.
China's chief trade negotiator late last week invited his
American counterparts for a new round of face-to-face talks,
according to people briefed on the matter, The Wall Street Journal
reported Thursday. Chinese officials hope the negotiations can take
place before the Thanksgiving holiday, but the U.S. side hasn't
committed to a date.
That report came less than a day after President Trump
criticized China's efforts to reach a trade agreement, escalating
concerns that the world's two biggest economies won't reach a deal
this year.
"The market really doesn't know what leg to stand on at this
stage," said Ole Hansen, head of commodity strategy at Saxo Bank.
"We have this roller coaster, or hamster wheel, on trade."
While visiting Apple Inc.'s Texas plant on Wednesday, Mr. Trump
said China isn't "stepping up" to the level he wants for the two
sides to reach a deal. That is further dimmed hopes that had
already been diminishing after Mr. Trump's threats in recent days
to raise tariffs further. The two sides so far have struggled to
reach an accord on specific commitments from China regarding the
purchase of U.S. agricultural products and the White House paring
back existing levies.
While hopes fade for a resolution in coming weeks to a trade war
that has weighed on the global economic outlook, investors aren't
likely to see any relief from a quick-paced easing in U.S. monetary
policy. Federal Reserve officials said little about what would
prompt them to resume interest-rate cuts when they signaled a pause
following last month's rate reduction, according to minutes of the
policy meeting released Wednesday.
"Markets have been climbing on hopes of a trade resolution and
easier monetary policy," said Russ Mould, investment director at
asset-management company AJBell. "Now the trade news was negative
overnight from China, and the Fed minutes were disappointing
insofar as they signaled a wait-and-see approach."
Adding to strains between the two nations, Beijing on Wednesday
summoned the highest-ranking U.S. diplomat in the capital to object
to Washington's support for Hong Kong protesters after the House of
Representatives passed legislation Wednesday requiring the U.S. to
re-examine its relationship with Hong Kong. That put formal
American support for the pro-democracy protests in the hands of Mr.
Trump.
Ahead of the U.S. opening bell, shares in Charles Schwab rose
7.3% in premarket trading after CNBC reported that the brokerage is
in talks to buy TD Ameritrade Holding, and a deal could be
announced as early as Thursday. TD Ameritrade climbed over 22%.
Shares in Tiffany rose more than 3.5% following a Reuters report
that LVMH Moët Hennessy Louis Vuitton SE has gained access to the
jewelry retailer's books after it improved its offer to almost $130
per share, or nearly $16 billion.
Among European equities, German steelmaker Thyssenkrupp was
among the biggest losers. The stock dropped 10%--putting it on
track for its worst decline in over three years -- after it said
Thursday that its 2019 loss had widened, and that restructuring
costs would likely cause a bigger loss next fiscal year.
Shares in Royal Mail dropped 16% after the company warned that
its U.K. business could be loss-making next year.
Later in the day, investors will have a further opportunity to
gauge the Fed's views on the economy and monetary policy when
Minneapolis Fed President Neel Kashkari and Cleveland Fed President
Loretta Mester give speeches.
The Labor Department is also scheduled to release data on
jobless claims, offering a signal on the strength of the U.S.
employment market. Separately, the National Association of Realtors
will release figures on sales of existing homes, which will likely
be parsed by investors for signs of a pick up in the muted housing
market.
--Joanna Chiu contributed to this article.
Write to Anna Isaac at anna.isaac@wsj.com and Caitlin Ostroff at
caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
November 21, 2019 07:40 ET (12:40 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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