Overnight China reported a worse than expected trade surplus ($81.7B vs street $89.8B) due to lower than expected import (0.3% vs street 0.9%) and export (2.4% vs street 6.0%) growth.
This news has sent shockwaves through world markets, once again increasing concerns about the health of its economy and the prospects for resource demand. To no surprise, Chinese equity markets gave back significant ground again with Hong Kong falling 3.6% and Shanghai losing 2.5%. Commodities are also getting hammered on the news. US Crude Oil has been hammered back down toward $70.00/bbl with a 4.25% loss today, which Brent Crude is down 4.0% and Copper is down 0.9%. Gold is holding steady.
US index futures are flat this morning, consolidating US index gains of 0.5%-0.9% which included an all-time high close for the Dow Industrials above 43,000. The FTSE is down 0.4%, getting dragged down by its exposure to resource stocks, while the Dax is up 0.3%.
Earnings season resumes this morning with positive results from several companies including Goldman Sachs* ($8.40 vs street $6.89, up 2.8% premarket), UnitedHealth ($7.15 vs street $7.00, down 3.6% premarket), Johnson & Johnson ($2.42 vs street $2.21), and Bank of America ($0.81 vs street $0.76). United Airlines reports after the close.
Canada consumer prices (1.6% vs street 1.8% and previous 2.0%) showed inflation pressures continuing to ease and giving the Bank of Canada the green light to keep cutting interest rates. In the US, the Empire State Manufacturing Index (-11.9 vs street 2.3 and previous 11.5) came in much worse than expected, suggesting a weakening economy.
*Shares of Goldman Sachs are held in some portfolios managed by SIA Wealth Management.