Tuesday's market minute

  • Global equities are trading strongly up as investors applaud the positive signals of the US-China trade talks and an agreement in principle to avoid a second US government shutdown.
  • European equities posted solid gains as the euro moved closer to its two-and-a-half month low against the US dollar, which is the longest series of wins in three years.
  • World oil prices have risen slightly but remain in the range, offset by record US production, OPEC reductions and slower global growth.
  • US equity futures suggest a three-digit gain for the Dow, ahead of Activision Blizzard, Under Armor and Molson Coors.
  • Market overview

    Global equities advanced on Tuesday as investors reacted to the preliminary agreement reached by US lawmakers, which would prevent a new government shutdown later this week and applaud the positive signals of the Washington-Beijing trade talks.

    Republican Senator Richard Shelby told reporters Monday that a tentative agreement had been reached with Democratic lawmakers to fund the US government throughout the current fiscal year, which ends in September, but said it did not include the $ 5.7 billion requested by the government President Donald Trump.

    Trump made a passing reference to the agreement last night during a rally in El Paso, but seemed to ignore the lack of funding for his 2016 signing campaign promise, telling the crowd of support "we let's build the wall anyway. "

    He also said that he did not want China to experience "difficulties", referring to the ongoing trade talks between Washington and Beijing, while one of his close allies, Kellyanne Conway, said to the Fox News channel that a meeting with the Chinese president was scheduled. Xi Jingping was still possible before the deadline of March 2 for the completion of the talks.

    The positive signs of the two issues helped Asian equities to post strong gains, including Japan's Nikkei 225, which allowed traders to return from a holiday in the weaker yen, which allowed the stock market to recover. index index jumped 2.6% at the close of markets, to 20,864.21 points. The MSCI ex-Japan index, which covers the entire region, was up 0.3% on the eve of the markets close.

    US equity futures were also underway, with Dow Jones Industrial Average contracts showing an opening bell gain of 114 points, while those related to the S & P 500 suggested a 14-point lead over the broader benchmark.

    The US results calendar is relatively light on Tuesday, but key reports are expected from video game maker Activision Blizzard (ATVI), as well as Molson Coors Brewing (TAP), Occidental (OXY) and Under Armor (UAA) .

    S & P 500 earnings are expected to contract by 0.2% in the first quarter of this year, according to Refiintiv, compared to a 26.5% growth rate over the same period last year, before rebounding only modestly at 3.6%. This weakness opened the prospect of an alleged earnings recession – during which profits fell for two consecutive quarters – in the first half of this year, the first of its kind since 2016.

    The US dollar index, which tracks the greenback versus a basket of six global currencies, hit a record 97,128 overnight, its highest level in three months, before reducing its gains early in the year. the European session, bringing the euro to its lowest level at least two and more. – a month and a half as investors sought out higher yielding assets in markets around the world.

    Paradoxically, the dollar has risen by about 2% relative to its peers since the US Federal Reserve eased its position on rate hikes earlier this year, with 10-year risk-free government yields offering between 2 , 5% and 2.7% more than similar titles published in Germany. or in Japan.

    European stocks also started well on Tuesday: the Stoxx 600 rose 0.6% in the first minutes of the Frankfurt market, led by banks and the financial sector, while the German performance of the Stoxx 600 was DAX index, extremely sensitive to global trade signals, has grown more than 1% in Frankfurt.

    World oil prices also rose slightly at the start of European trading, but remained broadly stable in the range last month, with traders balancing the impact of record US output with weaker economic fundamentals, production cuts OPEC and sanctions on the sale of Venezuelan crude.

    Despite the recent trading range, which maintained Brent at between $ 59 and $ 62.75 per barrel, the oil market's direction has dominated the largest US equity markets over the past two months.

    Brent contracts for April delivery, the global benchmark, rose 36 cents from their Monday close in New York and changed hands at $ 61.87 a barrel, while WTI contracts for March delivery – which closed at the lowest level yesterday – was seen 28 cents higher at $ 52.69 a barrel.