Global Stocks Wobble as Concerns About Trade Talks Mount
October 10 2019 - 6:38AM
Dow Jones News
By Avantika Chilkoti
Global stocks wavered Thursday as speculation about the outcome
of trade talks between the world's two largest economies weighed on
markets.
U.S. stock futures tied to the Dow Jones Industrial Average
flatlined after declining earlier in the day. Investors are
concerned that the U.S.-China trade negotiations, set to resume
later in the day, may fail to break a five-month stalemate as both
sides dialed back expectations in public comments.
Markets have been trying to assess the likelihood of a partial
trade deal, concessions by Beijing and a potential delay in
additional tariffs by the Trump administration.
"Throughout the course of the week we have had conflicting
signals from both sides of the negotiating table," said Matthew
Cairns, a senior rates strategist at Rabobank. He pointed to
Beijing's move to narrow the scope of the negotiations and the U.S.
expansion of its export blacklist, which raised the issue of
China's repression of Muslim minorities.
"That is a lot of to-ing and fro-ing from both sides of the
negotiating table, which clearly provides little material traction
for markets to grab on to," he said.
The Stoxx Europe 600 edged down 0.2%, giving up advances made
earlier in the day. In Asia, the Shanghai Composite Index gained
0.8% while Japan's Nikkei 225 rose 0.5%.
Philips Electronics was among the biggest losers in Europe. The
stock declined by about 8% in Amsterdam after the Dutch technology
company issued a profit warning.
Meanwhile, luxury stock LVMH Moët Hennessy Louis Vuitton gained
4.1% after the company posted better-than-expected revenue growth
for the third quarter, despite toughening conditions. Christian
Dior, which was acquired by LVMH in 2017, rose 3.4%.
The FTSE 100 index ticked down 0.2%, shedding gains earlier in
the day, as fresh data showed that the U.K. economy unexpectedly
contracted in August. Investors are monitoring Brexit negotiations
closely as Prime Minister Boris Johnson is due to meet Ireland's
Leo Varadkar. The pound gained 0.3% against the U.S. dollar.
Later in the day, the U.S. Labor Department is set to publish
its consumer-price index, which will shed light on whether
inflationary pressures are building in the U.S., a factor Federal
Reserve officials consider carefully as they set interest rates.
Economists surveyed by The Wall Street Journal forecast the index
rose 0.1% in September from the prior month and 1.8% from a year
earlier.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
October 10, 2019 06:23 ET (10:23 GMT)
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