Wall Street Drifts, While Intel Surges on Strong Earnings By Investing.com


© Reuters.

By Geoffrey Smith

Investing.com Wall Street drifted sideways at the start of the final session of the week, despite a business survey showing the U.S. economy continuing to perform above expectations on aggregate.

The U.S. composite purchasing managers index published by consulting firm IHS Markit rose to 53.1 in January, ahead of forecasts for a dip to 52.5, thanks to robust activity in the services sector. The manufacturing PMI did, however, dip to 51.7 from 52.4, suggesting only moderate growth.

By 1030 AM ET (1630 GMT), the was down 21 points, or 0.1%, while the S&P 500 was down 0.2% and the was flat, coming off an earlier record high.

Chipmaker Intel (NASDAQ:) was the standout performer, rising 7.2% to its highest since the very peak of the dot-com boom back in 2000 after reporting better-than-expected earnings after the bell on Thursday. The company continues to ride the wave of demand for high-powered chips from data centers on which Cloud servers run. It also enjoyed a kicker from demand for new PCs ahead of Microsoft’s deadline for ending support for Windows 7.

Rival Broadcom (NASDAQ:) also extended gains, rising another 2.5%, in the wake of its announcement of a major deal to supply Apple (NASDAQ:). Skyworks (NASDAQ:), whose products will be displaced by the deal, fell 4.2%

NextEra Energy (NYSE:), the parent company of Florida Power & Light, meanwhile overcame an initial dip premarket to rise 0.7%, as it reiterated its ultra-bullish guidance for the next three years.

American Express (NYSE:) rose 2.9% after reporting a strong holiday quarter, with U.S. spending on its cards up by 6% year-on-year.

Elsewhere, the , which measures the greenback against a basket of other currencies, hit a new high for the year of 97.710 before retreating to 97.665, up 0.2% on the day. oil prices continued to fall on fears of oversupply, as fears strengthened that the coronavirus outbreak will hit Chinese demand. They were down 2.2% at $54.40 a barrel, their lowest since October

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Wall Street slides on coronavirus fears, Intel offers support By Reuters


© Reuters. Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York

By Sruthi Shankar

(Reuters) – U.S. stocks fell on Friday, as investors were cautious heading into the weekend amid renewed concerns over the fallout of a coronavirus outbreak from China.

Intel Corp (O:) stood out with an 8.4% gain after the chipmaker forecast better-than-expected 2020 earnings, joining many of its peers to signal a recovery in chip demand.

After a record open for the Nasdaq, Wall Street’s main indexes lost ground as U.S. health officials confirmed a second U.S. case of the coronavirus in a Chicago woman and said as many as 63 potential cases were being investigated.

That added to nerves after the outbreak in China killed 26 people and infected more than 800 in the past week, raising concerns about its fallout on the global economy.

“It’s been a headline risk for the market,” said Quincy Krosby, chief market strategist at Prudential Financial (NYSE:).

“The question becomes whether or not this continues to spread quickly. The other issue is it’s a Friday. Do investors want to go long into the weekend or do they want to take some profits? Because the virus is not going to recede.”

Airlines and casino stocks fell again, with United Airlines Holdings Inc (O:) and American Airlines Group Inc (O:) shedding about 4%. Wynn Resorts Ltd (O:) and Melco Resorts & Entertainment Ltd (O:) fell about 3%.

Big banks including JPMorgan Chase & Co (N:) and Bank of America Corp (N:) fell more than 1.5%, tracking a drop in U.S. Treasury yields. [US/]

At 12:56 p.m. ET, the Dow Jones Industrial Average () was down 0.44% at 29,032.89. The S&P 500 () fell 0.65% to 3,303.91 and the Nasdaq Composite () dropped 0.52% to 9,353.15.

All three indexes were on track for their worst weekly declines since September, with quarterly earnings reports coming largely in-line with expectations.

Analysts expect earnings at S&P 500 companies to drop 0.5% in the fourth quarter, according to Refinitiv IBES data.

American Express Co (N:) rose 2.7% after reporting a better-than-expected quarterly profit as more people used its credit cards.

Healthcare stocks () fell 1.5%, dragged down by Bristol-Myers Squibb Co (N:) and Amgen Inc (O:).

Energy stocks () dropped 1.4%, hit by weaker oil prices on concerns that the coronavirus outbreak would curb travel and oil demand. [O/R]

Declining issues outnumbered advancers for a 2.21-to-1 ratio on the NYSE and a 2.60-to-1 ratio on the Nasdaq.

The S&P index recorded 84 new 52-week highs and three new lows, while the Nasdaq recorded 110 new highs and 44 new lows.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.



Wall Street hits new highs in strongest week since August By Reuters


© Reuters. Traders work on the floor at the NYSE in New York

By Noel Randewich

(Reuters) – Wall Street climbed to record highs on Friday, with major indexes turning in their strongest weekly gains since August, after strong U.S. housing data and signs of resilience in the Chinese economy raised hopes of a rebound in global growth.

Market sentiment brightened further this week after the United States and China sealed a Phase 1 trade deal, pausing an 18-month tariff dispute that has weighed on financial markets globally.

Earlier in the day, data showed China ended 2019 on a somewhat firmer note, even as economic growth cooled to its weakest in nearly 30 years.

Meanwhile, U.S. homebuilding surged to a 13-year high in December, suggesting the housing market recovery was back on track amid low mortgage rates.

“The macro data points both here and abroad have been relatively positive,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

“That is creating an increased sense of optimism going into not just the earnings, but also guidance which is far more important at this point for both Q1 and fiscal 2020.”

Analysts expect earnings at S&P 500 companies to drop 0.8% in the fourth quarter, but forecast a 5.8% rise in the first quarter of 2020, according to Refinitiv IBES data.

Many investors expect companies to be more upbeat about the future following the truce in the China-U.S. trade war.

“We think the most important thing this earnings season will be what CEOs say about their outlooks,” said Scott Ladner, chief investment officer at Horizon Investments in Charlotte. “That always matters, but we think that because of the speed at which some of these global uncertainties have been resolved, it’s unlikely we will see those things coming through in the numbers.”

Billionaire David Tepper, who founded hedge fund Appaloosa Management, told CNBC that he remains bullish on U.S. equities.

“We have been long and continue that way,” he said.

All three main indexes closed at record highs.

The Dow Jones Industrial Average () rose 0.17% to end at 29,348.1 points, while the S&P 500 () gained 0.39% to 3,329.62.

The Nasdaq Composite () added 0.34% to 9,388.94.

For the week, the S&P 500 added 1.96%, the Dow rose 1.82% and the Nasdaq increased 2.29%.

In a thin day for earnings, oilfield service provider Schlumberger NV (N:) reported a slightly better-than-expected quarterly profit, but its stock dipped 1.1%.

Google-parent Alphabet Inc (O:) rose 2.0%, extending gains after it became the fourth U.S. company to top a market value of $1 trillion on Thursday.

Technology majors including Visa Inc (N:), Apple Inc (O:) and Qualcomm Inc (O:) provided among the top boosts to the S&P 500.

Advancing issues outnumbered declining ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 1.24-to-1 ratio favored decliners.

The S&P 500 posted 127 new 52-week highs and no new lows; the Nasdaq Composite recorded 207 new highs and 14 new lows.

Volume on U.S. exchanges was 7.3 billion shares, compared with an average of 7.0 billion shares over the last 20 trading days.



Wall Street ends higher after U.S.-China deal inked


FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 14, 2020. REUTERS/Brendan McDermid

NEW YORK (Reuters) – U.S. stocks ended higher on Wednesday with the Dow posting a record close after the United States and China signed a Phase 1 trade agreement and pledged to resolve a tariff dispute that has roiled financial markets for over a year.

The Dow Jones Industrial Average .DJI rose 91.16 points, or 0.31%, to 29,030.83, the S&P 500 .SPX gained 6.2 points, or 0.19%, to 3,289.35 and the Nasdaq Composite .IXIC added 7.37 points, or 0.08%, to 9,258.70.

Reporting by Noel Randewich; Editing by Sandra Maler



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Wall Street dips from record in ‘Jason Bourne market’ By Reuters


© Reuters. Traders work on the floor at the NYSE in New York

By Noel Randewich

(Reuters) – U.S. stocks dipped on Tuesday, reversing earlier intraday record highs, following a report that the United States would likely maintain tariffs on Chinese goods until after November’s presidential election.

The eventual removal of tariffs by Washington would depend on Beijing’s compliance with the Phase 1 trade accord, which is expected to be signed on Wednesday, Bloomberg reported, citing sources.

With the S&P 500 at record levels, equivalent to around 18 times expected earnings, algorithmic traders and human investors interpreted the Bloomberg report as a reason to sell, said Joe Saluzzi, co-manager of Themis Trading, in Chatham, New Jersey.

“We’re in a Jason Bourne market. The first thing Jason Bourne does when he walks into a room is look for the exit, just in case,” Saluzzi said, comparing investor sentiment to the fictional action character.

The Dow Jones Industrial Average, S&P 500 and Nasdaq each touched intraday record highs before losing ground in afternoon trade. The Dow ended the session with a modest gain.

Wall Street has surged in recent weeks, fueled by optimism that a truce in U.S. President Trump’s trade war with China would boost corporate earnings.

China has pledged to buy nearly an additional $80 billion of manufactured goods from the United States over the next two years, and over $50 billion more in energy supplies, Reuters reported, citing a source briefed on the Phase 1 trade deal.

Kicking off the fourth-quarter earnings season, JPMorgan Chase & Co (N:) rose 1.2% after reporting a better-than-expected profit on strength in its trading and underwriting businesses.

Wells Fargo & Co (N:) tumbled 5.4% after reporting a slump in profit as it set aside $1.5 billion for legal expenses. Citigroup Inc (N:) rose 1.6% as it topped Wall Street profit estimates.

“It (bank earnings) is reflective of where we are in the economic cycle,” said Mike Loewengart, vice president of investment strategy at E*TRADE Financial Corp.

“We’re coming off a decade of consistent gains and banks, especially JPMorgan producing record earnings, it’s not surprising given the strength of the U.S. economy.”

Analysts expect profits at S&P 500 companies to drop 0.5% for the second consecutive quarter, according to Refinitiv IBES data, largely due to a drag in energy and industrial earnings that have been hit by the prolonged Sino-U.S. trade war.

The Dow Jones Industrial Average () ended up 0.11% at 28,939.67 points, while the S&P 500 () lost 0.15% to 3,283.15.

The Nasdaq Composite () dropped 0.24% to 9,251.33.

FedEx (N:) rallied 1.8% after CNBC reported that Amazon (NASDAQ:) had lifted a ban on its sellers using the company for ground deliveries.

Delta Air Lines Inc (N:) rose 3.3% after better-than-expected quarterly profit, boosted by customers gained from rival airlines’ 737 MAX cancellations. The S&P 1500 airlines index <.spcomair> climbed 1.5%.

Pinterest (N:) surged 9.6% after a report that the online scrapbook’s U.S. user base had surpassed Snap Inc’s (N:), making it the third-largest social media platform.

Advancing issues outnumbered declining ones on the NYSE by a 1.42-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored advancers.

The S&P 500 posted 60 new 52-week highs and no new lows; the Nasdaq Composite recorded 160 new highs and 27 new lows.

Volume on U.S. exchanges was 7.3 billion shares, compared with an average of 7.0 billion shares over the last 20 trading days.



Wall Street hits records on hopes tariffs will be dropped


(Reuters) – U.S. stock indexes jumped to new highs on Thursday, and Treasury yields rose, on a tweet from President Donald Trump that a trade deal with China was “very close” and a report that U.S. trade negotiators had offered to cancel a fresh round of tariffs on Chinese goods.

FILE PHOTO: The New York Stock Exchange is pictured in the Manhattan borough of New York, September 21, 2015. REUTERS/Carlo Allegri/File Photo

The S&P 500 .SPX, Dow Jones Industrials .DJI and the Nasdaq .IXIC opened lower then reversed after Trump’s statement, which comes just before tariffs are due to go into effect on Sunday. The indexes had slipped from record levels two weeks ago.

The Wall Street Journal reported U.S. negotiators have offered to slash existing tariffs by as much as half on roughly $360 billion of Chinese-made goods, supporting the bounce.

MARKETS:

** The S&P 500 briefly rose more than one percent to hit a record intraday high of 3,176.28 and was last up 0.5%.

** MSCI’s all-country world index .MIWD00000PUS, tracking shares in 49 countries climbed to 551.84 points to surpass the previous record of 550.63 points set in Jan 2018.

** The yield on the U.S. 10-year Treasury note US10YT=RR rose to a four-week high and was last at 1.8817%.

** The U.S. dollar index .DXY was up about 0.3%.

COMMENTS:

ROBERT PHIPPS, DIRECTOR, PER STIRLING CAPITAL MANAGEMENT, AUSTIN, TEXAS

“It’s very telling that financials and very cyclical stocks, rather than growth stocks, are leading most of this rally. If you do roll back tariffs, it does lessen the drag on the global economy, which I think will allow value stocks to finally start outperforming growth stocks.”

“We’re backing off the highs of the day just on the recognition that Trump has been crying wolf for 18 months now. The market has been doing something unusual in that it keeps rallying on the same news time after time, which is not what markets historically do. The algos took us up, and human beings stepped in, saying, ‘This is not new news.’”

“A Dec. 15 trade deal is already priced into the market. The real risk is that people will take profits whether a trade deal happens or not. With end of year window-dressing, any weakness is likely to be bought by professional portfolio managers. But we could see a 7 to 10% decline if tariffs are implemented.”

SUBADRA RAJAPPA, HEAD OF U.S. RATES STRATEGY, SOCIETE GENERALE, NEW YORK

“The sell-off in bonds is all based on the trade news. But it’s all binary outcomes — when we get positive news, bonds  sell off and on days that we don’t get positive news, we see a bond rally. But what is interesting is that we’re not really breaking out of any ranges in Treasuries. We have stayed broadly between 1.75% to 2% in the 10-year, without any meaningful catalyst for a rise beyond 2%. I will be looking to see where this goes. We’re at new  highs in equities and I just don’t know how much momentum is left in equities that’s going to support bond yields.”

WILLIE DELWICHE, INVESTMENT STRATEGIST, BAIRD, MILWAUKEE, WISCONSIN

“I don’t think many people expect a definite conclusion to what’s happening between the U.S. and China. But if we can reach some status quo and if things aren’t continuing to deteriorate, maybe that can be taken as a positive. I would say the view today, what Trump is saying and what China is responding, would suggest that maybe we are more at a status quo level of a detente than we are at further deterioration in relationships between the U.S. and China.”

“I think the implication from today would be they are certainly going to delay the tariffs that are supposed to go on this weekend.”

“Whether its a one-day event for the market or a basis for something to build on, that remains to be seen. But certainly the news of some progress between the U.S. and China, I think that’s good news for stocks and good news for the global economy.”

“There has been some evidence that things globally are maybe getting a little bit better, and I think this adds fuel there.”

BURNS MCKINNEY, PORTFOLIO MANAGER, ALLIANZ GLOBAL INVESTORS, DALLAS

“The reason things have rebounded is the President’s comment that the U.S. is close to a deal. … Until we actually have something firm I’m skeptical.”

“The Fed meeting, the UK election and the ECB meeting are potential speed bumps. The Dec. 15 deadline is not a speed bump. That’s a great big pot hole.”

“It’s extremely important the new tariffs don’t go into place. For the last several months there’s been a lot of noise on trade. This is not noise. This is the real thing, an important deadline.”

“All the trade escalation thus far has left the U.S. consumer largely insulated …. They’ve slowed down industrial investment. The U.S. consumer is the one pillar that’s been holding up the economy and the Dec. 15 tariffs are the ones that finally dig in where it hurts.”

“If you put these (tariffs) in place I worry it’s a chance it’s the crucial block in the Yenga tower. Sometimes there’s that one block that sends the tower crashing. It would certainly be negative for the economy.”

JOE SALUZZI, CO-MANAGER OF TRADING, THEMIS TRADING, CHATHAM, NEW JERSEY

“The market is definitely pricing in a trade deal, no question about it. You’ll probably get a ‘sell the news,’ since it’s already priced in. If there is no deal, that will be a big problem on Monday.”

“Even though it feels like we keep going up, up, up, a year ago we had a disaster in December. We got crushed. So when you look over a longer time period, it seems like a nice, steady path up to me.”

“We’re certainly on the upper end of a fair valuation. But if we get a good deal and take geopolitical risk out, why can’t we go higher?”

ART HOGAN, CHIEF MARKET STRATEGIST AT NATIONAL SECURITIES IN NEW YORK

“What this market has been trying to tell us is that we want to continue to work towards a deal. (From) October coming into last week was very much that ‘hey we are working on phase one’ so that is constructive. And constructive means that if we actually get a phase one deal done there is likely to be no further escalation from that point. That is the beginning of the end and the market sees that as returning some certainty to the economies and certainly to corporations. The big delta here has been that there is consumer confidence and a lack of corporate confidence and that is holding back corporate spending.”

“The market is saying we can remain constructive as long as you are working towards a deal. Escalation means bad things for both the market and the economy. That is what the market is telling us today.”

(This story in paragraph 20 corrects spelling to Jenga, not Yenga, applies to earlier versions of the story).

Compiled by Alden Bentley



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Wall Street Week Ahead: Tariff deadline keeps focus on trade as 2019 draws to close


NEW YORK (Reuters) – The stock market looks set to end 2019 the way it began the year — highly sensitive to headlines from President Donald Trump’s global trade war.

FILE PHOTO: Trucks offload containers from ship at the port of Los Angeles in Los Angeles, California, U.S. July 16, 2018. REUTERS/Mike Blake

Stocks pulled back from record highs to start December, undermined by comments from Trump and others in his administration suggesting any deal to resolve the trade dispute between the United States and China would not come soon. But the market rebounded at the end of the week on Friday’s strong U.S. jobs and a change in tone from Trump.

Wall Street could see more volatility ahead of Dec. 15, when the next tranche of U.S. tariffs on Chinese imports is set to take effect.

At the start of the week, investors said equity prices were factoring in that those tariffs would be delayed if not canceled as Beijing and Washington work on a “phase one” trade deal. But subsequent tough talk from Trump officials has shaken those expectations somewhat.

“Until we get some finality on this, the day-to-day is going to move on headlines that suggest progress or lack thereof,” said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta.

While the dispute between the world’s two largest economies commands the spotlight, other trade issues also have drawn investor attention. They include a recent delay in ratification of the North American Trade pact, potential U.S. tariffs on imported autos and Trump’s issuing surprise levies on steel imports from Brazil and Argentina.

Optimism over a U.S.-China truce has helped push the major Wall Street indexes to all-times highs recently, with the benchmark S&P 500 .SPX logging a gain of more than 20% so far in 2019. But as the latest swings show, lack of a resolution to a trade dispute that has lasted nearly two years continues to weigh on the market.

“The problem is the uncertainty that the trade war process has on business decisions,” said Art Hogan, chief market strategist at National Securities in New York. “Without some sort of short-term truce, company spending gets frozen and that’s where it affects the economy and the market.”

(GRAPHIC: U.S.-China trade war timeline – here )

The tariffs on $156 billion in Chinese imports that could take effect Dec. 15 are largely on consumer goods, including cellphones, laptop and desktop computers, toys and clothing.

UBS economists estimate those tariffs would drag on U.S. gross domestic product by either 0.1% or 0.2% in each of the four quarters next year. UBS projects overall GDP growth to average 1.1% in 2020, with tariffs generally weighing heavily in the first half of the year.

Aside from the fallout from the tariffs themselves, “the next read from them going into effect is that trade discussions are not going well,” said Walter Todd, chief investment officer with Greenwood Capital in South Carolina.

Political tensions over U.S. support for protesters in Hong Kong and over Beijing’s treatment of its Uighur Muslim minority have also raised concerns about the prospects for an initial trade deal.

“Without a phase one plan on getting something signed early in the new year, I think the market is susceptible for a pullback,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC.

The focus will remain on trade into next week, even as the Federal Reserve holds its last meeting of 2019, with the U.S. central bank expected to keep interest rates steady after three cuts earlier in the year.

“The Fed chairman pretty much outlined that the bar is very high to raise rates,” SunTrust’s Lerner said.

However, he added, if some of the tariffs result in a sharp slowdown, “the Fed would have to act eventually” by cutting rates.

FILE PHOTO: A Wall St. street sign is seen near the New York Stock Exchange (NYSE) in New York City, U.S., September 17, 2019. REUTERS/Brendan McDermid

Investors will also be looking for signs of strength in the holiday shopping season, given that consumer spending is seen as a key pillar holding up overall economic growth.

There is a strong incentive to push off the tariffs “as long as people are at the negotiating table,” said Carol Schleif, deputy chief investment officer at Abbot Downing in Minneapolis.

“President Trump definitely doesn’t want a downbeat consumer going into the election cycle,” she said.

Reporting by Lewis Krauskopf; Editing by Alden Bentley and Dan Grebler



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Which markets did best from Berlin Wall’s collapse? Wall Street and the BRICs, of course By Reuters



By Marc Jones

LONDON (Reuters) – The toppling of the Berlin Wall made free market economics the norm across Europe – but which financial markets have done the best since then? Wall Street and the BRICs, of course.

While the events of 1989 redefined Europe’s boundaries, they also ushered in almost two decades of powerful economic liberalization and globalisation that took in China, India and Latin America – a wave that is only now cresting.

For a graphic on Latin American economic since the Berlin Wall fell, click https://fingfx.thomsonreuters.com/gfx/editorcharts/GERMANY-BERLINWALL-MARKETS/0H001QXHR9CB/eikon.png

They are not the only factor, by any means. Also at work is a 30-year drop in global borrowing costs as inflation has been beaten back – even amid a boom for commodity producers, whose resources China has gobbled up.

A reunited Germany cemented itself as Europe’s largest economy, but an analysis of market performance suggests that the biggest winners are Wall St, flagbearer of Western capitalism, and the emerging ‘BRIC’ economies – Brazil, India, China and Russia.

Since Nov. 9, 1989, the S&P 500 has surged 1,635% in value, stocks in eastern Europe’s largest economy Poland are up 550%, and Russia’s Moex has risen nearly 900% since it became firmly establish in the late 90s.

That compares to a 350% rise in the reunified German when calculated in dollar terms, 320% in MSCI’s broadest world stocks index (), and nearly 460% in its global emerging market equivalent. ()

“There are multiple stories here,” said SEB Investment Management’s global head of asset allocation, Hans Peterson.

“In combination with the growth in emerging markets when they were liberalized and when China opened up, there has been (the fall of) bond yields of course, and we have killed off inflation, more or less.”

For a graphic on Global markets since the fall of the Berlin Wall, click https://fingfx.thomsonreuters.com/gfx/mkt/12/8445/8370/Pasted%20Image.jpg

Borrowing on global capital markets has also exploded as part of the liberalization.

Data analyzed by State Street (NYSE:) Global Advisors shows that most of the $120 trillion worth of emerging market debt in the world has been issued since the fall of the Wall. Over $40 trillion of that is in China though, including $27 trillion in the last 10 years alone. In comparison, Russia has only around $2 trillion, partly as a result of Western sanctions brought in over the last five years as relations have soured again.

“China is now the world’s second largest bond market,” said State Street’s Abhishek Kumar. “That is the really significant thing.”

For a graphic on EM debt issuance, click https://fingfx.thomsonreuters.com/gfx/editorcharts/GERMANY-BERLINWALL-MARKETS/0H001QXHT9CH/eikon.png

Currencies have had to ride out devaluations and various debt or financial crises. Russia’s rouble has halved in value against the dollar since Soviet times, whereas a deutsche mark/euro amalgam is fractionally higher.

The big winner by far in economic growth terms behind the former Iron Curtain has been Poland, where GDP has ballooned by almost $600 billion. Next best have been $250 billion improvements in the Czech Republic and Romania.

In Asia, it has been overwhelmingly China, which now has an economy worth nearly $14 trillion a year. It had been gradually opening since the death of Chairman Mao in 1976, but picked up considerable speed in the 1990s, and joined the World Trade Organization in 2001.

For a graphic on East European economies since the Berlin Wall fell, click https://fingfx.thomsonreuters.com/gfx/editorcharts/GERMANY-BERLINWALL-MARKETS/0H001QXHN9C1/eikon.png.

For a graphic on Asian economies since the fall of the Berlin Wall, click https://fingfx.thomsonreuters.com/gfx/editorcharts/GERMANY-BERLINWALL-MARKETS/0H001QXHQ9C7/eikon.png

REBUILDING BARRIERS

The question many economists and investors are now asking, however, is whether these moves may be reversing.

The U.S. and China are locked in a trade war. Relations between Western countries and Moscow have chilled rapidly since Russia’s annexation of Crimea in 2014 and accusations that it meddled in the 2016 U.S. election, which Moscow denies.

Poland is ruled by an avowedly nationalist, eurosceptic party and Hungary and Serbia have been getting closer to Russia again.

In an Open Society poll published on Friday of around 12,500 citizens in Central and Eastern Europe, a majority of respondents in Slovakia (61%), Hungary (58%), Romania (58%), Bulgaria (56%), Germany (52%) and Poland (51%) believed democracy was currently under threat.

Markets have not yet taken a definitive view, but are grappling with the reality that most central banks have taken interest rates as low as they can go, and countries’ growth and finances is being sapped as their populations get older.

China’s blue-chip stocks have underperformed the S&P 500 by almost 30% since the outbreak of the trade war, but Russia’s stock and bond markets are some of the best-performing this year, and many of Eastern Europe’s markets are flying too.

“I think the momentum of ’89 is almost at its limits today,” said Didier Saint-Georges, managing director of the 35-billion-euro asset manager Carmignac.

“There is a huge rebellion against (political and economic) liberalism. It is being hugely challenged.”

For a graphic on Markets since trade war broke out, click https://fingfx.thomsonreuters.com/gfx/mkt/12/8449/8374/Pasted%20Image.jpg



Wall Street treads water as trade-fueled rally pauses By Reuters


© Reuters. Traders work on the floor at the NYSE in New York

By Arjun Panchadar and Agamoni Ghosh

(Reuters) – Wall Street halted a record run on Friday as U.S. President Donald Trump contradicted reports that the United States and China would roll back existing tariffs.

The S&P 500 and Dow Jones indexes had closed at all-time highs on Thursday after officials said both countries had agreed to roll back tariffs on each others’ goods in a “phase one” trade deal if it is completed.

But Trump said on Friday he had not agreed to roll back the tariffs, although Beijing would like him to do so. The news sent all three major U.S. stock indexes sharply lower, but they quickly recovered to trade near flat.

“Investors somewhere knew that there was an existing issue regarding the rollback of these tariffs and with record highs being set, a little consolidation is to be expected,” said Michael Geraghty, capital market strategist at Cornerstone Capital Group in New York.

Seven of the 11 major S&P 500 sectors were trading lower, with the energy sector shedding 1.51% as oil prices fell. Trade-sensitive technology stocks dropped 0.11%.

Still, the S&P 500 is on track for its best year since 2013, while the Nasdaq and blue-chip Dow are eyeing yearly gains after dropping in 2018, partly propelled by a rosy third-quarter earnings season.

Of the 430 S&P 500 companies that have reported results so far, nearly three quarters have beaten profit estimates, according to IBES data from Refinitiv. Those numbers, to some extent, reflect significantly lowered analysts’ forecasts.

Walt Disney Co (N:) gained 3.96% as its popular theme parks and a remake of “The Lion King” lifted earnings, and the company also spent less than it had projected on its online streaming service, Disney+.

At 10:32 a.m. ET the Dow Jones Industrial Average () was down 52.84 points, or 0.19%, at 27,621.96 and the S&P 500 () was down 2.47 points, or 0.08%, at 3,082.71. The Nasdaq Composite () was up just 5.28 points, or 0.06%, at 8,439.80.

Among other stocks, Gap Inc (N:) tumbled 8.14% after it said Chief Executive Art Peck would leave the company, a surprise exit in the middle of a restructuring. The apparel retailer also slashed its full-year earnings forecast.

Activision Blizzard Inc (O:) fell 1.36% after the video game publisher forecast fourth-quarter adjusted revenue below estimates, as it faces stiff competition from online and free-to-play games.

Energy drinks maker Monster Beverage (O:) was up 3.53% after posting a better-than-expected third-quarter profit and announcing a $500 million share buyback plan.

Declining issues outnumbered advancers for a 1.14-to-1 ratio on the NYSE and for a 1.01-to-1 ratio on the Nasdaq.

The S&P index recorded 14 new 52-week highs and two new lows, while the Nasdaq recorded 37 new highs and 59 new lows.

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U.S.-China trade optimism lifts Wall Street to record high


(Reuters) – Technology stocks pushed Wall Street’s three main indexes to record highs on Monday, as hopes of a U.S.-China trade deal and an improving domestic economy boosted risk appetite.

FILE PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 31, 2019. REUTERS/Brendan McDermid

Washington and Beijing said on Friday they had made progress in defusing an economically damaging trade war, with U.S. officials indicating that a deal could be signed this month.

Adding to the upbeat mood, Commerce Secretary Wilbur Ross said on Sunday licenses for U.S. companies to sell components to China’s Huawei Technologies Co would come “very shortly”.

Eight of the 11 major S&P 500 sectors were higher, with the energy sector .SPNY gaining the most as oil prices rose, while technology shares .SPLRCT provided the biggest boost on the back of a rally in trade-sensitive chip stocks.

The Philadelphia Semiconductor index .SOX touched a fresh record high, with the index last up 1.4%.

“There is growing enthusiasm over a trade deal, as progress is being made in these talks,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Investors are betting that some sort of a deal is on its way, not a whole deal but something that will at least avoid a recession. And markets can live with that,” he added.

The third-quarter earnings season has been a key driver for the markets, with 76% of the 360 S&P 500 companies that have reported results so far beating profit expectations, according to Refinitiv data.

Investors also took comfort from data on Friday that showed U.S. jobs growth slowed less than expected in October.

A report on Monday, however, showed new orders for U.S.-made goods fell more than expected in September and business spending on equipment was slightly weaker than initially thought, suggesting that manufacturing remains soft amid the ongoing trade war.

At 10:11 a.m. ET the Dow Jones Industrial Average .DJI was up 131.44 points, or 0.48%, at 27,478.80, the S&P 500 .SPX was up 13.58 points, or 0.44%, at 3,080.49 and the Nasdaq Composite .IXIC was up 44.55 points, or 0.53%, at 8,430.95.

The biggest drag on the blue-chip Dow Jones index was a 2.6% drop in shares of McDonald’s Corp (MCD.N) after the fast-food giant dismissed Chief Executive Steve Easterbrook over a recent consensual relationship with an employee, which the board determined violated company policy.

Under Armour Inc (UAA.N) fell 14.6% as it lowered its full-year revenue forecast for a second straight time, a day after it confirmed a federal probe related to its accounting practices.

In M&A activity, medical device maker Stryker Corp (SYK.N) said it would buy smaller rival Wright Medical Group (WMGI.O) for about $4 billion in cash. Shares in Wright Medical surged 29.6%, while Stryker fell 4.1%.

Advancing issues outnumbered decliners by a 2.10-to-1 ratio on the NYSE and by a 2.06-to-1 ratio on the Nasdaq.

The S&P index recorded 52 new 52-week highs and no new low, while the Nasdaq recorded 101 new highs and 13 new lows.

Reporting by Arjun Panchadar and Shreyashi Sanyal in Bengaluru; Editing by Anil D’Silva



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