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China waives tariffs, NFP preview & Uber safety

European shares have opened stronger on Friday before the release of US monthly employment figures. That follows a generally upbeat session in Asia. Similarly LCG pricing points to a higher start on Wall Street. The British pound is hovering at 2-year highs against the euro while the dollar is near its weekly lows. Gold is treading water near a one-month high while oil is little changed at the start of the 2nd day of the OPEC meeting.

China waives pork tariffs (while US tell porkies)

It’s not the first time this point has been made by any stretch but... The comments made by President Trump and his team about the state of trade negotiations with China are really stretching the limits of credibility. Luckily some real proof that a trade deal could be imminent came by China waiving tariffs on some US soybeans and pork imports. You might say China waiving tariffs on pork back up the US porkies. Digging a bit deeper into the supply and demand for these products in China things might not be quite as rosy as they seem. A swine flu out break in China means it suited Beijing to offer the waivers to the US imports to address the drastic reduction in pork supply. Still, it keeps up appearances for a phase one deal.

Rising scepticism about their ability to judge the current state of affairs on trade has pushed traders to look for other clues about the next market direction. And this week those clues have come in the form of generally soft data out of the US and Europe.

Non-farm Payrolls preview

The standout disappointment this week was the November ADP unemployment report. It came in at half the average expectation with the smallest monthly job growth since May. The correlation between ADP and NFP is not well defined but were NFP to come in soft too- a marked deterioration in the US labour market would be upon us. That could easily renew talk of a US recession next year with a typical market reaction of lower treasury yields, a weaker dollar and a pullback in equities. The return of General Motors worker from on strike should give the NFP numbers a favourable skew over ADP, perhaps reducing the risk of a repeat of Wednesday’s disappointment.

Passenger safety issues at Uber

We do not think ride-hailing apps are going anywhere but the industry needs to evolve to make sure journeys are safe for passengers. This latest report on sexual assault involving Uber drivers and passengers is a real shocker. Female passengers especially might well look at this report and think twice about using an Uber.

The share price fell yesterday but investors have been prepped about the release of this report since before the IPO. The silver lining is that the report is a welcome move toward transparency for Uber. What the share price does from here depends on how Uber use this information to improve passenger safety. What we would like to see is a firmer process for hiring drivers- and probably some kind of vetting process for passengers too. This problem will not be exclusive to Uber and needs to be tackled at an industry level. Collaboration between ride sharing apps– including sharing background check information is necessary. The risk to not addressing the problems this report raises is not only to passenger safety -but also to these apps user growth.

24-1-2020

Markets cheery and central bankers dreary…
EQUITIES Shares in Europe look set for a strong start to trading on Friday morning. The World Health Organisation not designating the Wuhan coronavirus an international emergency has taken the fear gauge down a few notches. The travel restrictions and cutback… Read more

23-1-2020

Risk aversion back on coronavirus & US-EU Trade. ECB up next
EQUITIES Risk aversion has taken hold across Asian markets with the sad and worrying news of more deaths due to the coronavirus in China. Official reports now indicate nearly 600 cases and Macau has cancelled Lunar New Year celebrations after a second case of… Read more

22-1-2020

DAX record high, Tesla $100B & markets brush off pandemic
EQUITIES Blowout fourth quarter earnings and subscriber growth at Netflix has refocused investors’ attention on market fundamentals. Market sentiment had been impaired by worries about the new coronavirus out of China, which has now spread to the United State… Read more

20-1-2020

Oil prices spike on Libya pipeline closure, Europe to open higher
EQUITIES European shares are set to open higher on Monday in what may be a more muted day of trading with Wall Street closed for Martin Luther King Jr. Day. Trading in Asia was light with US investors on holiday today and Chinese New Year celebrations set to b… Read more

17-1-2020

S&P 500 tops 3,300 as Alphabet reaches $1 trillion
EQUITIES European shares look set to open higher on Friday bolstered by stats showing stable economic growth in China and another record-breaking session on Wall Street that saw the S&P500 top 3,300 for the first time. Mining companies are likely to featur… Read more

16-1-2020

Europe to open higher & Sterling recovers
Shares in Europe and on Wall Street are set for a higher open on Thursday after a positive session in Asia.   Wall Street notched up new records and finished the day higher after the signing of the phase one US China trade deal. That the S&P 500 and Nasdaq… Read more

15-1-2020

Stocks, oil lower as Tariffs stay in place, Persimmon, Goldman Sachs, Saunders, UK CPI
European shares are lower on Wednesday after a down session in Asia while LCG pricing points to a lower start on Wall Street. US Treasury Secretary Steve Mnuchin confirmed that tariffs against China will remain until November, after the US election. The tariff… Read more

14-1-2020

Currency manipulator, China exports, Yuan 5-month high, US bank earnings
European shares are flat on Monday after a mixed session in Asia while LCG pricing points to a lower start on Wall Street. INDICES: US removes China currency manipulator status Wall Street has yet again reached new record highs in the lead-up to the signing… Read more