The Markets at a Glance

Here are today’s top picks on the economic front impacting the market to keep you updated before you head for the door:

U.S. Trade War

According to news reports, an executive order by President Donald Trump is under way to give Japan and the E.U. a further 180 days for them to agree voluntary, on import tariff restrictions on European and Japanese car imports.

The China trade conflict escalated after the U.S. Commerce Department put a ban on Huawei 5G network equipment being sold in the U.S. and put in place a new requirement for any U.S. Company to obtain a license before they could sell it.

Oil Prices Climb

Mounting tensions in the Middle East and data showing that U.S. gasoline inventories dropped saw a rise in oil prices.

Also, supporting the rise is the contaminated oil flow in a Russian pipeline resulting to restricting the flow of their export oil pipeline to Europe and the escalating tensions in the Middle East.

Crude oil WTI Futures climbed to $62.44 a barrel and Brent International benchmark also gained nearly $2 from Monday’s price at $72.13 a barrel.

OPEC, Russia and other oil exporting countries are due to meet to review the world oil market in the next two days. They are also expected to take an overview of their output restraint deal.

Accusations by Saudi Arabia that Iranian backed Houthi rebels in Yemen were behind the attacks on their oil export facilities were formally announced.

Stocks Set to Open Higher on Wall Street

Impacting the stocks is the blacklisting of Huawei by the US government and its suspended business activity with Google but positive Walmart and Cisco earning results aided Wall Street shares to open higher.

Data showing weaker than expected retail sales and industrial production in April from both China and the U.S. saw market participants unwilling to take on more risk.

At 5:45 AM ET Dow futures contract was up 16 points with a gain of 3.5 points on the S&P Futures, also up 7 points the Nasdaq 100 futures. Top winners were Cisco after reporting a 6% rise in revenues year on year, their shares rose 5% to $55.09 Close behind Walmart with a 80% jump in profits for the first quarter of 2019. Their shares rose 2.6% to $102.44.


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U.S. Treasury Bonds

An escalation in tensions between the U.S. and China trade negotiations saw investors seeking safe-haven buying, with yields on 10-year U.S. Treasury bonds falling to 2.37%.

This was despite news reports from the Treasury that China sold a net worth of $20.5 billion of bonds, at its fastest rate in two years, in March.

T. Rowe Price Sells Tesla Stake

According to a fund manager’s disclosure, T. Rowe Price cut its holding of vehicle maker Tesla Shares selling most of its 8.9 million shares to 1.7 million during the start of the year to the end of March.

The sell-off by Tesla’s biggest and earliest public investors leaves Tesla more reliant on its retail investors as they try to ramp up production and return to profitability.

What’s next in the trade war?

Markets are bracing themselves as Washington and Beijing harden their positions. American Century Investment Management Inc, co-chief investment officer for global fixed income, Charles Tan believes markets are underestimating the length of time it could take to resolve.

Analysts and economists are not predicting a recession, but say that there could be a trimming of as much as 0.6 percentage point off U.S. growth by 2020 and 1.5 percentage points in China if there is a full-blown trade war.

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