Futures Up Despite Growth Concerns, EU Leaders Reach Consensus, Asia Falls On Weak Data
The U.S Futures Are Up Despite Lingering Growth Concerns
The U.S. futures are looking at a positive open on Wednesday despite lingering growth concerns. The trade-truce announced by Presidents Trump and Xi has increased optimism although evidence of global economic slowing persists. The ADP employment figures came in at 102,00 for the month of June, up from the previous month but still shy of the expectations.
The pace of job growth in America has slowed significantly in the past three months and may lead to recession. The weekly jobless claims show jobless claims are hovering near long-term lows and consistent with general economic health. Jobless claims were released a day early due to a holiday. The Dow Jones Industrial Average is the morning laggard with a gain of 0.16%, the S&P 500 and NASDAQ Composite are both up about 0.22%.
Growth concerns are fueled by the seemingly endless string of tariffs coming out of Trump’s White House. Earlier in the week, Trump announced up to $400 million in new tariffs on EU goods, today he announced 400% tariffs on Vietnamese steel. The EU tariffs are meant to combat unfair subsidies on EU aircraft, the Vietnamese tariffs to combat steel-dumping from Korea and Taiwan.
EU Markets Up After Leaders Reach Consensus
The EU markets are up modestly after consensus is reached on nominations for the bloc’s top spots. After three days of intense negotiation EU leaders have agreed on nominations for ECB chief and EU president. Christine Laggard of the IMF has been tapped for ECB chief, German Ursula von der Lyden for ECB president. The nominations will now go the EU parliament for confirmation. Bond yields in the EU fell sharply on the news while defensive stocks rallied. Laggard, at least, is seen as a dove and likely to embark on stimulus measures if approved.
The UK FTSE 100 led today’s gains with an advance of 0.72% by midday. The moves come a day after UK PMI data shows the British economy shrank for the first time since 2016. The German DAX and French CAC were both showing gains near 0.60%.
Asian Markets Fall On Weak Data
Asian markets were broadly lower on Wednesday despite hopes for a Trump/Xi trade deal. The Korean Kospi led the decline with a loss of -1.23% after the country lowered its growth forecast for the year. The Shanghai Composite posted the second largest decline, about -0.95%, after the Caixin PMI showed slowing in China’s small-cap economy. The Japanese Nikkei shed about -0.50%, the Hang Seng about -0.07%, while the Australian ASX posted the only gain in the region.
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