Market Update: Tuesday, November 13, 2018

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Daily Insights

  • Stocks pause after back-to-back weekly gains. After rebounding from October’s volatility spike over the past two weeks, investors used negative headlines tied to a few bellwether firms in the U.S., along with political tensions in Europe and Washington as reasons to take some gains off the table yesterday. Equity flows went into defensive sectors, with growth-oriented technology shares bearing a brunt of the selling pressure. Stocks are rebounding this morning, however, with major U.S. indexes opening higher on the heels of bargain hunting and upbeat earnings from a major home improvement retailer.

  • U.S., China begin dialogue ahead of Trump, Xi Summit meeting. Reports indicate Treasury Secretary Mnuchin spoke with China’s Vice Premier Lui He last Friday in an effort to negotiate trade terms ahead of the G20 Summit taking place at the end of this month. The U.S. reportedly wants China to make a concrete offer ahead of the summit, at which Presidents Donald Trump and Xi Jinping are expected to meet; however, Chinese officials are resisting the demand for fear of losing leverage. Still, both countries’ interest in coming to back to the table is a positive and we could see a “tariff truce” come out of the G20 meetings, though expectations for a final deal by year-end may prove optimistic.

  • Tide turns in Treasury futures. Speculators who built the biggest net short position on record in 10-year Treasury futures have cut their short positions drastically since the end of September, projecting higher prices and lower yields. On the LPL Research blog, due out later today, we analyze what the stark change in Treasury futures positioning could signal for sentiment in fixed income.

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Tuesday

Wednesday

  • CPI Report (MoM, Oct)
  • Germany GDP Report (Preliminary, Q3)
  • Eurozone Industrial Production (Sep)
  • Eurozone GDP Report (Preliminary, Q3)

Thursday

Friday

  • Eurozone CPI Report (Oct)
  • Industrial Production (MoM, Oct)
  • Capacity Utilization (Oct)

 

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