Global markets were waylaid this week by resurgent worries surrounding trade which coincided with renewed missile tests from North Korea. Both the S&P and NASDAQ tested below their 50-day moving averages for the first time since January, and the Russell 2000 briefly moved back into correction territory. Before Monday’s opening bell, President Trump had already announced tariffs would be raised to 25% by the end of the week while threatening to go even further.
Friday’s trade saw a significant reversal from the week’s lows after US and Chinese officials concluded two days of discussions in Washington. Despite the implementation of intensified US tariffs and the looming threat of even more down the pike, along with an open threat of retaliation by the Chinese, both sides agreed talks had remained constructive and would push forward in the future.
The VIX popped to the highs of the year midweek, but moderated as markets seemed to become accustomed to the salvos of trade barbs.
Emerging market currencies suffered and the Dollar gained significant ground against the Yuan. Dr. Copper retraced to the lowest level since January, and WTI crude got within a few pennies of $60 per barrel before rebounding after weekly crude stockpiles shrank.
For the week, the S&P fell 2.2%, the Dow lost 2.2% and the NASDAQ shed 3%.
In corporate news this week, earnings season began to wind down. Intel moved lower after warning in an investor presentation that its move to a more competitive chip space could affect profit margins and medium-term revenues going forward. Communications infrastructure firm Zayo Group agreed to go private for $35/shr after months of reports of a potential takeover. Chevron announced it would not raise its offer for Anadarko and accepted the $1B breakup fee after Occidental finalized its $38B competing bid to acquire the hydrocarbon E&P giant. Uber opened for trading below its IPO price of $45 as investor appetite wobbled after a long journey going public.
Macro :
- China, U.S. Trade Talks Stalled Over Three Areas, Xinhua Says
- Liu Says China, U.S. to Continue Talks in Beijing in Future
- 1MDB’s Jho Low, Rapper Pras Michel Indicted Over Obama Donation
- Yuan May Weaken to 6.95 Per Dollar on Trade Tensions: NatWest
Keep an eye on :
- AC FP : Accor in Talks to Invest Up to $40m in Treebo: Economic Times
- AVP US : *AVON FALLS 2% AS NATURA DENIES REPORT OF LOAN FOR TAKEOVER
- BAYN GY : Financial Firms Vie to Buy Assets from Bayer: Handelsblatt
- BAYN GY : Bayer Hires Law Firm to Probe Monsanto’s Stakeholder Mapping
- BMW GY : BMW, Daimler to Review Hungary Ramp-Up Plans: Handelsblatt
- CNE LN : Cairn Energy Is Said to Seek Sale of Norwegian Oil-Field Stake
- CRG IM : Carige May Attract PE Funds After BlackRock Exit, Newspapers Say
- DAI GY : China's BAIC seeks to buy 5 percent Daimler stake - sources - https://reut.rs/2VfTmqb - Reuters
- FRE GY : Fresenius Seeks Potential Buyers for Transfusion Business: FAZ
- FGP LN : Coast Capital Calls for FirstGroup to Replace Six Directors: FT
- GEO IM : Geox First Quarter Revenue Meets Estimates
- GLEN LN : Zambia Tells Glencore to Surrender Shafts Set to Close
- ISP IM : Italy’s Banca IMI Pleads Guilty to Bid-Ridding Scheme for ADRs
- MRK GY : Merck KGaA Will Pursue MS Pill Alone After Mixed Trial Results
- MTRO LN : *METRO BANK EXPLORES SALE OF MORE THAN GBP1B WORTH OF LOANS: FT
- NOVN SW : Novartis Eyes Zolgensma Discounts to Get Insurer Coverage: Rtrs
- NOVN SW : Novartis Issues Voluntary U.S. Recall of Promacta, FDA Says
- NSF LN : NSF Plans to Push Ahead With Hostile Bid for Provident: Times
- PFG LN : Coltrane Rejects NSF’s Hostile Bid for Provident: Times
- RDSA LN : Delek: Gulf of Mexico Deal Canceled as First Refusal Executed
- SAL IM : Salini Wins EU530m Contract in Turkey for High-Speed Train
- STOB LN : *STOBART GROUP TO PICK DAVID SHEARER AS NEW CHAIR: SKY
- TELIA SS : Telia Gets EU Probe Into Takeover of Bonnier TV Operations (1)
- TKA GY : Thyssenkrupp Reaches Pact With IG Metall for Job Cut Program
- TKA GY : Thyssenkrupp Open to Partnerships, Asset Sales: Handelsblatt
- TIS IM : Italian Investors Agree to Buy 22% Stake in Tiscali
- FP FP : Goes Further in Liquefied Natural Gas With $8.8 Billion Deal in Africa - WSJ - https://on.wsj.com/30e8zLN
- UBER FP : Uber's Fall Could Postpone Payday for Kalanick, Early Investors
- UNA NA : Unilever Considers $1 Billion Bid for Skincare Brand: Telegraph
- VIFN SW : Vifor Pharma’s Phase-II Amber Study Meets Primary Endpoint
- VOD LN : Vodafone May Sell Tower Firm Stake to Redeem Pledged Shares: ET