The increase in US stocks, rising oil and bond yields, amidst the trade war

The market minute of Thursday

• Global stocks are falling, as benchmark indexes have risen slightly, but the markets for oil bonds and government bonds are becoming more popular as the cycle of trade war continues.
• World crude prices extend gains, pushing the price of oil to more than $ 71 and Brent to $ 80, after Wednesday's drop in domestic stocks and before the OPEC meeting Sunday in Algeria
• US bond yields posted gains as 10-year bonds traded at 3.06% overnight, as the strength of the US economy stayed the course on the Fed.
• Oil prices are expected to support the Dow's anticipated gains as futures contracts gain 33 points, with the S & P 500 and Nasdaq appearing to have changed little from last night's close.

Snapshot of the market

Global equities plummeted on Thursday, with modest gains in Asia and weaker European opening as investors assessed the risk landscape due to higher bond yields and crude prices likely to offset the bullish sentiment of the stock market.

Of course, market tensions continue to weigh on the markets, but lower-than-expected rates were unveiled this week in Washington and Beijing, and no new headlines on both sides of the session pushed up prices. dead end. have instead been spied on from other corners of the market to take their bearings on the direction of equity.

In fact, JPMorgan's CEO (JPM), Jamie Dimon, said that it was more just to call the dispute between China and the United States a "commercial skirmish" rather than a dispute. "Commercial war".

"Our president is right to raise the issues (regarding trade) with China," he told CNBC on Thursday, but added that he "could use a different strategy." will go to. "

Global oil markets, where prices rose for a third consecutive session, exceeded $ 71 per barrel and pushed Brent's contacts closer to the $ 80 level, according to data showing that domestic inventories fell lowest level in three and a half years and before a key meeting of OPEC members later this week in Algeria.

The 2% increase in oil yesterday, in fact, helped the Dow Jones Industrial Average up 158 points at the top of the US equity indexes, although a slight decline of 0.08% for Nasdaq Composite Some investors are worried about the significant gains this year in the technology sector.

Brent crude contracts for delivery in November, the global benchmark, were 13 cents higher than Tuesday in New York and 79.53 dollars a barrel. WTI contracts for the same month increased 27 cents to 71.11 dollars.

Early indications of US equity futures suggest that oil gains will continue to support the Dow, with contracts tied to the average of 30 stocks, showing a bell gain of 44 points, while those related to the S & P 500 are trading at about 2.7 points up.

The rise in crude oil prices, fortunately for emerging market investors, was offset by a drop in the US dollar index, which reached its lowest level in seven weeks at 94.35, even though 10-year bonds were around 3,063. %, suggesting that a decent measure of risk aversion remains in the market, even as stock indexes around the world continue to rise. The longer-term bond yields, which reached 3,248% yesterday, fell to 3.21% during the session.

Yields: on the move! 10 more above 3%, this time without worry of the financial media. Look at 3.25% out of 30 Two closures above = game changer.

– Jeffrey Gundlach (@TruthGundlach) September 19, 2018

In Asia, the MSCI ex-Japan index rose 0.19%, despite a slight shift in shares in China, while Japan's Nikkei 225 managed to record its four consecutive gains, barely, with a 0 lead, 01% following the resumption of the action. Election of Prime Minister Shinzo Abe, who is on track to become the longest-running country's democratic leader by the end of his term in 2019.

European equities were equally cautious, but bullish, with the Stoxx 600 surging 0.31% as markets open, while benchmark indices in the region posted similar gains.

The British FTSE 100, whose shareholders make about 75% of their income outside the UK, fell into negative territory while the pound hit 1.3191 against the dollar after a stronger than expected release in August, up 3.3% same period last year.

Part of the upward sentiment in the global market is certainly due to the fact that the US economy continues to extend its lead at the end of the cycle, with the Federal Reserve's GDPNow indicator showing a growth rate of 4.4% in the third quarter.

Added to this is the fact that, while the Fed remains clear in its future interest rate signaling, other central banks around the world have great difficulty in tightening their monetary policy, either economically ( Japan or United States). United Kingdom) or political (in the case of monitoring developments in Italy by the European Central Bank).

Added to this is, of course, the central bank's estimated $ 11 trillion in liquidity surplus, which continues to spread in global financial markets.