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Morning Market Scoop 29 January 2019

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Barry Dumas
Moring-market-scoop

Morning Market Scoop 29 January 2019

In our morning market scoop:

  • US-China Trade War Hits the headlines again .

“U-S-A, U-S-A, U-S-A!”

What’s the scoop? U.S & China Trade Negotiations

The U.S-China trade negotiations hit the headlines once more as the two super powers go head to head this week to hopefully resolve its ensuing trade war.

  • S Treasury secretary Steve Mnuchin and trade rep Robert Lighthizer will meet delegates from China headed by Vice-Premier Liu He on Wednesday.

The big picture The now famed Trade War between China and the U.S has been the talked about topic of 2018. The two countries exchanged tariffs of more than $360 billion, with the largest amount being $250 billion, imposed by the United States. Back in December the world’s two largest economies came to an agreement to delay any increases on goods until the 1st of March 2019.

  • This week’s talks aren’t expected to hit the ball out the park with a deal on the table, but the best-case scenario might be if the Chinese come to the table with an offer on economic reforms that’s more ambitious than expected.

SOME FACTORS TO KEEP AN EYE ON THIS WEEK:

U.S ADP Non-Farm Employment change: The U.S. ADP Non-farm Employment Change is a very good predictor of the Non-Farm Payrolls report as the ADP Non-Farm Employment Change measures the monthly change in non-farm, private employment. The ADP data will be released on Wednesday around 15:15 SAST.

FOMC Interest Rate Decision: The U.S. Federal Reserve's Federal Open Market Committee (FOMC) will announce whether the interest rates in the U.S. will increase or remain unchanged. This event will be watched closely by market participants and will have an impact on the markets. The Interest Rate Decision will be announced on Wednesday at 21:00 SAST.

  • It is expected that the interest rates will remain unchanged at 2.50%.

Non-Farm Payrolls: The Non-Farm Payrolls report (NFP) is treated as an economic indicator for people employed during the previous month. The number released will have a direct impact on the markets. The NFP Jobs number will be released on Friday at 15:30 SAST.

  • In the United States consumer spending accounts for most of the economic activity and the Non-Farm Payrolls report represents 80% of the U.S workforce. Farmers are excluded from the employment figures due to the seasonality in farm jobs.

U.S Earnings: U.S earnings is in full swing and some of the notable companies reporting this week are as follow:

  • Tuesday, 3M, Apple, ebay, SAP
  • Wednesday, Alibaba, at&t Boeing, Facebook, Microsoft, McDonalds, PayPal and VISA
  • Thursday, Amazon, General Electric and Ups
  • Friday, Chevron, ExxonMobile and Sony

What does all this mean for me?

  • If the best-case scenario is achieved, then that would mean that financial markets would rally including ours as months of Trade War anxiety comes to an end.

 

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