Morning Update: Trade Talks in Doubt

Monday, May 6, 2019 8:36 AM | Brad Spears

First Look

Stocks are down in the pre-market Monday following President Trump’s Sunday tweets about increasing tariffs on Chinese imports. In the two tweets, the president threatened to hike tariffs on $200 billion in Chinese goods by Friday, with the possibility of imposing a 25 percent tariff on $325 billion in Chinese goods currently not covered by import duties. Trump said he is not satisfied with the current rate of progress after both sides had previously reported “positive” negotiations. China’s Vice Premier Liu He was scheduled to continue talks in Washington this week. Chinese officials are still planning to attend, but it is unclear if Vice Premier He will be in attendance. China could back out of any deal, with the country not wanting to show weakness by submitting to the intensified pressure. Elsewhere, the U.S. is sending an aircraft carrier and bomber group to the Middle East to send a message to Iran that attacks on U.S. interests would not be tolerated. North Korea carried out its first ballistic missile test since 2017, further destabilizing the ongoing nuclear talks between Korea and the U.S. The S&P 500 is down -1.6%, the Dow Jones is down -1.78%, the Nasdaq is down -2%.

Today's Market Outlook

Bearish

Quote of the Day

History repeats itself, first as tragedy, second as farce.
Karl Marx

Stocks on the Move

Anadarko Petroleum Corporation (APC), Red Hat Inc (RHT) and Newmont Goldcorp Corp (NEM) are moving higher this morning, while Wynn Resorts, Limited (WYNN), Fastenal Company (FAST) and Micron Technology, Inc. (MU) are headed lower. DISH Network Corp (DISH), Sinclair Broadcast Group Inc (SBGI) and ImmunoGen, Inc. (IMGN) were upgraded by analysts this morning, while Expedia Group Inc (EXPE), Hilton Hotels Corporation Common Stock (HLT) and Five Below Inc (FIVE) were downgraded.

International Markets

Stocks in Asia are down. The Shanghai SE Composite Index is down -5.58%, the Hang Seng is down -2.9%, the Mumbai Sensex is down -0.93% the Australia ASX All Ordinaries is down -0.89% and the Nikkei 225 is down -0.22%.In Europe stocks are mixed. The FTSE 100 is up 0.4%, the DAX is down -1.71%, the Euro Stoxx 50 is down -1.76% and the CAC 40 is down -1.86%.

Futures & Currencies

Energy futures are down today. The price for West Texas Intermediate crude oil is down -0.36 at 61.58 per barrel. Brent crude is down -0.18 at 70.67 per barrel. Natural Gas is down -0.01 at 2.56. Precious metals are mixed this morning. Gold is up 0.4 at 1281.7 per ounce. Platinum is down -4.15 at 867.75 while silver is down -0.12 at 14.86. The dollar is mixed compared to the major currencies today. The greenback is down against the euro, down against the Yen and up against the Pound.

Put/Call Ratio

Yesterday, 1,258,967 call contracts traded on the Chicago Board Options Exchange (CBOE) compared to 651,176 put contracts. The single-session put/call was 0.52 while the 20-day moving average is now at 0.6.

Today's Economic Calendar

No. What's Happening? Period Release Time
1 None

Earnings Expected Today

AIG, AIZ, AMG, BHC, BHF, FMC, GLPI, HHC, IFF, INVH, KLAC, KRC, MASI, MOS, OXY, PXD, QGEN, RE, RNG, RP, SSY, TSN, UGI

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