The relief rally of the last two days appears to be winding down once again as hopes for a quick end to the tariff war were dashed once again. Chinese officials indicated overnight that they are not in any talks with the United States and that if the US wants to move forward, they should drop the tariffs the White House recently imposed.
US index futures are flat to down 0.5% this morning, a moderate pullback from yesterday’s 1.1% to 2.5% gains for US indices. In Europe today, the FTSE is down 0.2% and the Dax is down 0.3%. Commodities are climbing with Crude Oil up 1.2% and Copper up 0.4%.
We are also seeing a risk-off tone re-emerging in currency markets with Gold rebounding 1.7% and Bitcoin sliding 0.9%. Although the US 10-year treasury note yield has stabilized near 4.35%, the US Dollar has resumed its retreat this morning falling 0.6% against the Yen, 0.5% against the Euro, 0.4% against the Pound, 0.3% against the Aussie, and 0.2% against the Loonie.
Response to positive technology earnings from last night has been mixed between IBM* ($1.60 vs street $1.42, down 6.6% premarket) and Texas Instruments ($1.28 vs street $1.07, up 9.2% premarket). Alphabet and T-Mobile US* headline results after the close.
*Shares of IBM and T-Mobile US are held in portfolios managed by SIA Wealth Management.