U.S. stock futures were up to start the week suggesting a rebound from Friday’s losses on Wall Street, after President Trump on Sunday struck a more conciliatory tone about China. Still, that didn’t prevent a lower close across key Asian stock markets. Gold also jumped again, pulling up mining stocks in Europe.
It’s Columbus Day; equities markets will trade but Treasurys won’t. As the U.S. government shutdown continues, little new economic data is expected to help investors, albeit the Bureau of Labor Statistics does aim to publish September’s inflation print at some point.
Ahead, JP Morgan Chase, Citigroup and Goldman Sachs get major bank earnings rolling on Tuesday.
–U.S. futures for the S&P 500 were last up 1.5%, futures for the Dow Jones Industrial Average rose 1% and Nasdaq futures were up 2.1%. President Trump in a social media post on Sunday wrote: “Don’t worry about China, it will all be fine!” He added that China’s President Xi Jinping, “had a bad moment,” in reference to China’s move last week to slap export controls on rare earth materials.
–Still, Asian markets on Monday mirrored the drops seen in the U.S. on Friday after President Trump had threatened new trade restrictions on China. Hong Kong’s Hang Seng fell 2.1%, China’s benchmark Shanghai Composite declined 0.2% even after China’s exports rose at the fastest pace in six months in September. South Korea’s Kospi ended down 0.7%, snapping three sessions of gains. Markets in Japan were closed.
–Europe’s Stoxx Europe 600 gained 0.5% shortly after the open, with gains of 0.7% in France’s CAC 40 and Germany’s DAX. The U.K.’s FTSE 100 added 0.2%. London’s silver and gold miners jumped as precious-metal prices continued to rise. Gold futures were up 1.3% on safe-haven demand while silver traded above the historic $50 mark. Among miners, Fresnillo was up 6.15%, Endeavour Mining rose 5.3% and Hochschild Mining traded up 4.9%.
–The U.S. dollar edged lower amid the renewed trade tensions. Its decline has so far been limited as most seem to expect another U.S.-China trade agreement to be made, Commerzbank’s Thu Lan Nguyen said in a note. While the tariffs would hit China’s export economy, they would be “just as painful for U.S. importers.” The DXY dollar index against a basket of major currencies was last down 0.1% to 98.878.
–Bitcoin recovered slightly after hitting a three-and-a-half-month low at the weekend; it was recently up 0.2% to $115,299 after hitting a low of $104,782 Saturday, according to LSEG data. It remains well below the record high of $126,223 reached on Oct. 6.
–Oil prices were up, with Brent crude and WTI both gaining 1.6% to $63.71 and $59.39 a barrel, respectively, after settling about 4% lower last week. Oil gains, though, are limited by an easing geopolitical risk premium in the Middle East after Israel and Hamas agreed to the first phase of a U.S.-brokered plan for a cease-fire and hostage release in Gaza. The latest oil market report from the Organization of the Petroleum Exporting Countries lands later.
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