SEOUL, South Korea (AP) — Global stock markets were mostly higher Friday investor appetite for risk returned after the U.S. said it was exploring the possibility of returning to trade talks with 11 Pacific countries. Sentiment also improved as the U.S. said it is consulting allies before making a final decision on possible military strikes against Syria.
KEEPING SCORE: Britain’s FTSE 100 was flat at 7,256.35 in early trading while France’s CAC 40 rose 0.2 percent to 5,320.74 and Germany’s DAX gained 0.5 percent to 12,472.06. Futures augured a tepid start on Wall Street with S&P futures up 0.1 percent and Dow futures also up 0.1 percent.
ASIA’S DAY: Asian markets finished higher. Nikkei 225 rose 0.6 percent to 21,778.74. South Korea’s Kospi advanced 0.5 percent to 2,455.07. Hong Kong’s Hang Seng index edged down 0.1 percent to finish at 30,808.38. China’s Shanghai Composite Index lost 0.7 percent to 3,159.05. Australia’s S&P/ASX200 rose 0.2 percent to 5,829.10. Stocks in Taiwan, Singapore were higher but in the Philippines and Indonesia they were lower.
CHINA DATA: China’s global trade balance swung to a rare deficit in March as exports dropped, but its surplus with the United States stood at $15.4 billion. Exports contracted 2.7 percent from a year earlier to $174.1 billion, down from the 24.4 percent growth for the first two months of 2018, customs data showed Friday. Imports rose 14.4 percent to $179.1 billion, though that was down from 21.7 percent growth in January and February.
ANALYST’S TAKE: “U.S.-centric politics once again played the key role in shifting the alternating market sentiment with President Donald Trump toning down on the attacks upon Syria,” Jingyi Pan, a market strategist at IG in Singapore, said in a daily commentary. “Early movers in the Asian region have certainly caught on this improved sentiment, with the icing on the cake being President Donald Trump’s directive to consider the re-joining of the Trans-Pacific Partnership.”
TRADE: Trade has been a big issue that swayed global stock markets since the onset of the trade dispute between the United States and China. Those concerns took a backseat as Trump asked advisers to explore the possibility of the U.S. returning to trade talks with 11 Pacific nations to rejoin the Trans-Pacific Partnership.
SYRIA: Trump put off a final decision on possible military strikes against Syria after tweeting earlier that they could happen “very soon or not so soon at all.” The White House said on Thursday the United States will continue to consult its partners and allies. The statement eased worries about escalation of tensions. Trump’s earlier tweet suggested that he wanted to retaliate against Russia after the recent suspected chemical attack in Syria.
OIL: Benchmark U.S. crude rose 51 cents to $67.58 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 0.4 percent on Thursday to settle $67.07 a barrel. Brent crude, used to price international oils, fell 26 cents to $71.76 per barrel in London. It shed 0.1 percent to finish at $72.02 a barrel on Thursday.
CURRENCIES: The dollar rose to 107.58 yen from 107.32 yen. The euro strengthened to $1.2332 from $1.2328.
– Here are the top five things you need to know in financial markets on Friday, April 13:
1. Trump trade turnaround
U.S. President Donald Trump appears to have shifted gears on trade policies as he told his top economic advisors to study the possibility of reentering a massive Pacific trade deal, suggesting a turnaround from his prior confrontational stance.
The President told chief economic advisor Larry Kudlow and U.S. Trade Representative Robert Lighthizer to examine a return to the Trans-Pacific Partnership (TPP) that Trump abandoned in 2017, according to a White House spokesperson.
However, Trump did emphasize late Thursday that the rejoining TPP would only be an option if the U.S. received “substantially better” terms than the previous deal.
Asian equities celebrated the apparent backtracking with Japan’s Nikkei ending the session with gains of 0.6%. China’s Shanghai Composite was a notable exception, closing down around 0.7% on the back of a weak reading in exports.
European shares also traded mostly higher on Friday, though some weak earnings reports limited gains.
U.S. futures pointed to a mixed open on Friday. Coming after the prior session’s strong gains, investors looked ahead to bank earnings and economic data. At 5:35AM ET (9:35GMT), the blue-chip
2. Banks kick off earnings season
Banks will unofficially kick off the first-quarter earnings season on Friday as major financial institutions prepare to unveil the effect of tax cuts and increasing interest rates on the bottom line.
Overall, expectations are for profits at S&P 500 firms to grow 18.4% in what would be their biggest quarterly profit in seven years.
JP Morgan (NYSE:JPM), the first component of the Dow Jones to report this season, is scheduled to release earnings at around 7:00AM ET (11:00GMT), followed by Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) approximately one hour later.
Analysts are forecasting earnings per share of $2.28, $1.61 and $1.06, respectively.
3. Oil heads for weekly gains of 9%
Oil prices moved higher on Friday as another monthly report pointed to tightening markets.
OPEC and its allies appear to have accomplished their mission of bringing global oil stocks to desired levels, the International Energy Agency (IEA) said in its monthly report released Friday, predicting that inventories should drop to their five-year average -a metric used by OPEC to measure the success of output cuts- by as early as May.
“It is not for us to declare on behalf of the Vienna agreement countries that it is ‘mission accomplished’, but if our outlook is accurate, it certainly looks very much like it,” the IEA said in its monthly report.
Buoyed by geopolitical tension over Syria earlier in the week, the U.S. benchmark was on track for weekly gains of 8.8%, while Brent was up around 8%. The move would be the largest weekly rise since last July.
Later on Friday, market participants will keep an eye on increasing U.S. shale production with the Baker Hughes’ weekly rig count data.
4. Consumer confidence in focus
On Friday’s economic calendar, traders will focus on the preliminary reading of consumer sentiment for April to be released by the University of Michigan at 10:00AM ET (14:00GMT).
The index is expected to drop to 100.6 from the 101.4 registered in March that was its highest level since 2004.
Also on the economic docket, the U.S. Labor Department will release its Job Openings and Labor Turnover Survey (JOLTs) at the same time.
Furthermore, market participants will keep an eye on appearances by Federal Reserve members Eric Rosengren at 8:00AM ET (12:00GMT), James Bullard at 9:00 AM ET (13:00GMT) and Robert Kaplan at 1:00PM ET as they monitor for clues on whether policymakers remain optimism on inflation and economic growth.
Ahead of these references, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.09% to 89.41 by 5:36AM ET (9:36GMT).
5. China registers first trade deficit in a year
Trade data released Friday showed that Chinese exports unexpectedly fell in March, causing the world’s second largest economy to post its first trade deficit in dollar-denominated terms since February 2017.
Specifically, China’s trade deficit hit $4.98 billion in March, compared to the prior month’s $33.75 billion surplus. That was as its exports unexpectedly declined 2.7% on the year, compared to a forecast for a 10.0% gain. Imports rose 14.4%, beating expectations for a 10.0% advance.
Despite the monthly deficit, China’s trade surplus with the U.S. surged nearly 20% in the first quarter with analysts indicating that exporters had sped up shipments in the first three months of the year to get ahead of any threatened tariffs.