- Improved China data saw stocks rise Friday ahead of newly scheduled trade-war talks, easing concerns about a slumped start to 2019 for equity markets.
- European markets and US futures were trading up despite Thursday’s Apple-led bloodbath in stocks.
- Trade-war tensions remain front and center of markets following weak industrial data out of China and fears about slowing global growth.
2019’s ugly start for markets looked to be taking a breather Friday after stocks in Asia responded positively to a stimulus package announced by Beijing and after news that renewed trade talks between China and the US were set to take place next week.
Despite a litany of concerns, including Apple’s Thursday sales warning and weak manufacturing data out of China, Chinese markets bounced Friday, reflecting an optimism for new trade talks with the US scheduled for Monday and Tuesday.
Chinese banks are also to benefit from a cut in reserve requirement ratios as well as lower fees and taxes as China looks to boost its cooling economy. Beijing slashed RRR four times in 2018 in an attempt to free up money for additional lending, with more cuts possible in the coming year.
It’s yet another sign that US-China trade-war tensions have affected the global economy after the agricultural giant Cargill reported worse-than-expected results out of China on Thursday, when Apple’s shock forecast preceded a tumble in markets.
Markets will have their eyes on eurozone and UK PMIs due later Friday as well as nonfarm payroll figures out of the US, which are expected to be up. Estimates suggest an increase to approximately 178,000 in December – up from 155,000 in November – with wages also higher, reducing concerns about weak ISM manufacturing data from Thursday.
“This will be good news for otherwise depressed sentiment in the financial markets,” said Sung Won Sohn, the chief economist at SS Economics. “There is growing concern that the economy will slowdown significantly 2019.”
- Chinese stocks closed higher, with the Shanghai Composite and Hong Kong’s Hang Seng up 2% each.
- Other Asian markets were mixed: The Nikkei closed down 2.3%, while Australian markets finished 0.3% lower. South Korea’s KOSPI rose 0.8%.
- European markets have responded positively, with French, British, and German equities all up and the Euro Stoxx 50 trading up 0.9% as of 9:05 a.m. in London (4:05 a.m. EST).
- US futures are all trading up more than 1%.
- Oil prices were bouncing back, with Brent Crude futures trading up 1.8% at $US56.92 while Copper prices were up 1.2%, rebounding from Thursday’s 18-month lows.
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