US stock returns and returns rise as risk appetite recovers despite trade war

The minute of the Wednesday market

• Global equities rise as Wall Street's bullish tone ripples into markets around the world, pushing stocks up in Europe and Asia after weaker-than-expected escalation of Sino-US trade war
• The appetite for risk, combined with lingering concerns about the inflation, pushed yields on 10-year US Treasuries to 3.05%, a four-month high.
• The book tests the two-month highs ahead of the key meeting between Prime Minister Theresa May and European leaders in Austria on the Brexit plans.
• Crude prices are still holding up because of speculation that OPEC members could not increase production to offset the impact of sanctions on the sale of Iranian crude.
• US equity futures suggest more gains for Wall Street today, with Dow-related contracts showing a 58-point hike in the opening bell.

Snapshot of the market

Global equities advanced on Wednesday, as Asian markets followed Wall Street's rally last night, as investors encouraged a weaker than expected US-China response in their trade war. two large economies may be ready to negotiate an agreement.

China's decision to take 5% tariff measures on US imports to $ 60 billion, after President Donald Trump added 10% levies on goods worth $ 200 , did not meet the expectations of investors. both sides correctly, should not have a significant impact on economic growth or corporate profitability.

In fact, although it has currently cited a global trade war as the most worrisome of risk, Bank of America Merrill Lynch's benchmark fund manager survey, which surveyed 244 investment managers with a market value of more than $ 742 billion, noted that US equities remain the most favored markets in global markets, largely because corporate profits – which are expected to grow more than 20% for the third consecutive quarter – have remained very high.

The rally of last night on Wall Street, which saw the Nasdaq Composite focused on technology 61 points, or 0.78%, while the Dow Jones Industrial Average index and the S & P 500 up 0.7% and 0.55% respectively, kicked off the session in Asia as investors added risk and dropped US bonds following Tuesday's headlines.

Movements lifted the MSCI Asia ex-Japan index by 0.99% before the last trading hours, while the stronger US dollar pushed the yen to a multi-week low of 112.39 Nikkei 225 23,672.52 points.

The reaction of the Chinese state media has been relatively lukewarm, with the editorials of the People's Daily and the China Daily both focusing on the country's resilience in the face of adversity and the need to change national policies to offset the tariff impact. suggesting that this could be read as a tacit admission that its export-driven growth model needs to be adjusted by Beijing.

Shares in China ended the session with their second consecutive gains, with the Shanghai Composite up 1.1% and the CSI 300 up 1.3%.

US equity futures, on the other hand, posted solid, though not spectacular, inauguration gains with Dow-related contacts suggesting a 58-point lead, while S & P 500 investors pushed 3, 1 points.

European markets were also stronger at the start of the session as base stocks dominated gains, with the Stoxx 600 index rising 0.3% to a record high of 379.82 in the last two weeks. The currency, which traded at 1.1679 against the greenback, dampened the lead.

The strength of the currency also kept the FTSE 100 in check, while it rose by 0.22% at the start of the London talks, while the pound flirts with peaks of 1.3175 before a key meeting between the Prime Minister Theresa May and 27 European leaders. Austria, later today, during which she is supposed to argue her case in favor of her so-called Checkers proposal, which outlines the UK's negotiating position on Brexit, but which has been until now rejected by officials in Brussels.

US 10-year Treasury yields, which peaked at 3.052% over four months on Tuesday, maintained gains in day-to-day trading, while 2-year bonds reached 2.803%. and fixed income portfolios adjusted for faster inflation, which could be triggered by the application of import tariffs that would affect consumer prices at the end of the year. year.

A persistent concern for the bond market, however, may be that the Treasury data are expected to hold $ 1.1 trillion in July, the lowest in seven months, even as its trade surplus continued to be one year. record of 192.63 billion dollars in August.

Global oil markets were also active as investors changed prices ahead of the meeting of OPEC member states, and Russia in Algeria, which is expected to focus on the impact of November sanctions on sales Iranian crude. 580,000 barrels have already been withdrawn from the market, as customers seek supplies elsewhere.

Brent's contracts for delivery in November, the global benchmark, were a few cents higher than their close on Tuesday in New York and changed hands to just over $ 79 a barrel, while WTI contracts the same month.