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World Stocks Mostly Higher Tuesday 12/11 05:54
World markets were mostly higher on Tuesday after the U.S. and China
broached plans for talks to soothe a festering trade dispute.
SINGAPORE (AP) -- World markets were mostly higher on Tuesday after the U.S.
and China broached plans for talks to soothe a festering trade dispute.
KEEPING SCORE: In Europe, Germany's DAX gained 0.7 percent to 10,696.51 and
France's CAC 40 added 0.7 percent to 4,775.32. Britain's FTSE 100 was up 0.3
percent at 6,743.91. Wall Street was set to open lower. Dow futures fell 0.3
percent to 24,410.00 and the broader S&P 500 futures lost 0.4 percent to
ASIA'S DAY: Softer economic data from Japan and China weighed on some Asian
indexes on Tuesday. Japan's benchmark Nikkei 225 lost 0.3 percent to 21,148.02
and South Korea's Kospi dropped less than 0.1 percent to 2,052.97. But Hong
Kong's Hang Seng edged 0.1 percent higher to 25,771.67. The Shanghai Composite
rose 0.4 percent to 2,594.09. Australia's S&P/ASX 200 added 0.4 percent to
5,575.90. Shares rose in Taiwan but fell in Singapore, Indonesia and Thailand.
U.S.-CHINA RELATIONS: U.S. Treasury Secretary Steven Mnuchin and Chinese
Vice Premier Liu He have spoken by phone about "the promotion of the next
economic and trade consultations," a statement by China's Commerce Ministry
said Tuesday. It did not elaborate. This indicates that the detention of Meng
Wanzhou, the chief financial officer of Chinese telecommunications giant
Huawei, in Canada may not derail trade talks. Meng is wanted in the U.S. for
allegedly misleading banks about the company's business dealings in Iran. China
has protested her arrest and a bail hearing for Meng is underway in Vancouver,
British Columbia. Still, traders fear a 90-day tariffs cease-fire may not be
enough for the countries to resolve deep-seated issues.
ANALYST'S TAKE: "While traders have responded positively to comments from
China providing a semi-road map going forward, they are waiting for something
concrete. Markets want to see a definite timeline against a backdrop of global
risks," Stephen Innes of OANDA said in a phone interview.
BREXIT HURDLE: British Prime Minister Theresa May has postponed a
parliamentary vote on a Brexit deal that she was widely expected to lose. The
deal, brokered between May and 27 other European leaders, has been criticized
by Brexit supporters and opponents alike. May acknowledged Monday that deal
would likely be rejected "by a significant margin" and said she will seek
assurances from the European Union before calling for another vote. A date has
not been set.
IPHONE BAN IN CHINA: On Monday, U.S. chipmaker Qualcomm said it won an order
in a Chinese court banning sales of some Apple phones in China. This is part of
a lengthy dispute over two Qualcomm patents allowing users to format photos and
manage phone apps using a touch screen. Although Qualcomm said the ban applies
to models of the iPhone 6S through X, Apple said all iPhones will remain
available for customers in China. Qualcomm shares jumped 2.2 percent to $57.24
on the news.
ENERGY: Oil prices were steady after a sharp decline overnight that erased
gains from news of a production cut by OPEC countries and other major oil
producers. U.S. benchmark crude lost 5 cents to $50.95 a barrel in electronic
trading on the New York Mercantile Exchange. It gave up 3.1 percent to $51.00 a
barrel in New York on Monday. Brent crude, used to price international oils,
shed 6 cents to $59.91. The contract dropped 2.8 percent to $59.97 a barrel in
CURRENCIES: The dollar weakened to 113.08 yen from 113.34 yen. The euro rose
to $1.1384 from $1.1355. The British pound strengthened to $1.2625 from
$1.2567. It fell to a 20-month low of $1.2515 on Monday.
Jan beans finished down 7 cents, March corn down 1.5, and March wheat down 6 cents. US Trade Representative Robert Lighthizer went on cable news over the weekend making clear that March 1st was a “hard deadline” for the US – China trade talks. Concerns over the timeline and the ability to get something done before then were weighing on markets today. Market direction is going to follow the outcomes of these talks. The arrest of Meng Wanzhou (CFO of Huawei) is still weighing on the talks. China is protesting the arrest to the US ambassador in China saying it will take an unspecified “further action”. Anything threatening a trade resolution is weighing on ag market. The news regarding the Wanzhou bail hearing are likely going to add to the weakness we saw today. Market is still chasing headlines.