Global Stocks Slip as U.S.-China Trade Talks Continue
DOW JONES & COMPANY, INC. 8:06 AM ET 4/4/2019
U.S. stocks were set for a choppy start Thursday as President Trump prepared to meet top Chinese officials in Washington to resolve the continuing trade dispute, a major investor concern amid doubts around growth in the world's leading economies.
Futures pointed to nearly flat opens for both the Dow Jones Industrial Average and the S&P 500.
In Europe, the Stoxx Europe 600 was down 0.3% in midday trading. And in Asia, the Shanghai Stock Exchange was up 0.9%, Hong Kong's Hang Seng Index dipped 0.2% and Japan's Nikkei was up 0.1%.
Liu He, China's vice premier, will visit the White House later Thursday. Investors are watching closely for Mr. Trump to set a date for a summit with President Xi Jinping, which experts say would signal that negotiators are nearing an agreement.
Jason Daw, head of emerging markets strategy at Société Générale, warned that a trade deal might be just a first step in a continuing conflict between the two nations.
"The trade war issue itself is a small part of a large economic, geopolitical, military tension between the U.S. and China," Mr. Daw said, noting U.S. officials may see a potential deal as setting the tone for future tensions. "If they can't come to something that they can believe is to their benefit on this topic, how are they going to come to resolutions on much bigger topics?"
Global markets have jumped this week, extending the bullish sentiment from the beginning of the year, fueled by dovish comments from the Federal Reserve. However, analysts said worries about global growth remained following a slew of disappointing economic data.
Investors have read recent commentary from the Fed and the European Central Bank, which have pledged to put off rate rises, as a signal that top policy makers see a slowdown ahead, according to Bhanu Baweja, a strategist at UBS.
"There are times when bad news is good news but there are times when bad news is bad news," he said.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was up 0.1%.
The 10-year U.S. Treasury edged down to 2.504% from 2.517% on Wednesday. Yields move inversely to prices.
With the trade dispute threatening to weigh further on growth in the world's two largest economies, investors will be watching closely when the March U.S. jobs report is published on Friday. Economists surveyed by The Wall Street Journal expect the U.S. economy to have added 170,000 to payrolls in March and the unemployment rate to hold steady at 3.8%.
In the U.K., Prime Minister Theresa May met with opposition leader, Jeremy Corbyn, in a high-risk attempt to find a compromise Brexit deal this week.
The British pound was down 0.2% on the dollar and down 0.1% on the euro Thursday. The FTSE 100 index, which is dominated by large international businesses, dropped 0.4%, while the FTSE 250 was down 0.5%.
Dec Mullarkey, managing director of investment strategy at Sun Life Investment Management, sees the risk of a "no deal" Brexit, where the U.K. comes tumbling out of the European Union without an agreement in place, as falling in recent days. He said in a written comment that there is now "a very favorable entry point for those investors that are underweight" U.K. assets.
In commodities, global benchmark Brent crude oil was down 0.4% at $69.56 a barrel.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
04-04-190806ET
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