SINGAPORE (AP) — World markets were mixed Wednesday as investors focused on trade tensions, with China delaying licenses to American businesses ahead of expected tariffs from Washington. The price of oil continued to rise on concerns that Hurricane Florence could disrupt supplies.
KEEPING SCORE: In Europe, France’s CAC 40 gained 0.5 percent to 5,309, while Britain’s FTSE 100 was down 0.2 percent at 7,262. Germany’s DAX added 0.2 percent to 11,988. Wall Street was poised to open slightly higher, with Dow and S&P 500 futures both rose 0.1 percent.
ASIA’S DAY: Japan’s benchmark Nikkei 225 lost 0.3 percent to 22,604.61, and the Kospi in South Korea was almost flat at 2,282.92. Hong Kong’s Hang Seng index was 0.3 percent lower at 26,345.04. The Shanghai Composite index fell 0.3 percent to 2,656.11. Australia’s S&P/ASX 200 shed 0.1 percent to 6,175.90.
CHINA-U.S. TENSIONS: China is putting off accepting license applications from American companies in financial services and other industries until Washington makes progress toward a settlement, an official of a business group said Tuesday. The disclosure is the first public confirmation of U.S. companies’ fears that their operations in China or access to its markets might be disrupted by the battle over Beijing’s technology policy. The license delay applies to industries Beijing has promised to open to foreign competitors, according to Jacob Parker, vice president for China operations of the U.S.-China Business Council. The group represents some 200 American companies that do business with China. President Donald Trump’s administration is poised to slap tariffs on $200 billion in Chinese goods and is considering tariffs on $267 billion more.
ANALYST’S TAKE: “China’s ability to respond is limited in tariffs, the government is using what they call ’qualitative measures,’” said Robert Carnell, head of research and chief economist at ING Bank. “You can’t put a number on that, but it’s not an idle threat. They could really make it hard for U.S. companies to operate in China.”
BREXIT DEAL: Hopes for a Brexit deal rose this week, pushing up the pound and helping stock markets. Britain’s Treasury chief Philip Hammond said Tuesday that he agreed with the EU’s Brexit negotiator that reaching a divorce deal with the European Union over the next two months is “doable.” Business groups and civil servants say a “no-deal” Brexit could cause disruption in shipping, barriers to trade with the bloc, a fall in the value of the pound and even shortages of essential goods.
ENERGY: Benchmark U.S. crude added 67 cents to $69.92 a barrel, after surging past $70 in the Asian session. The contract gained 2.5 percent to $69.25 per barrel in New York. The approach of Hurricane Florence and its potential to disrupt oil supply on the East Coast spurred gains. The U.S. is also getting ready to put sanctions on Iran’s energy industry. Brent crude, used to price international oils, rose 15 cents to $79.21 a barrel. It jumped 2.2 percent to $79.06 a barrel in London on Tuesday.
CURRENCIES: The dollar fell to 111.48 yen from 111.59. The euro was down to $1.1591 from $1.1605, and the pounds was roughly steady at $1.3023 after rising sharply the day before.
Investing.com – Here are the top five things you need to know in financial markets on Wednesday, September 12:
1. Apple iPhone Launch Event
According to reports, the new top model is expected to have a 6.5-inch (16.5-cm) screen with an edge-to-edge display and be called the iPhone X Plus or Max. It would have an OLED display with richer colors, and Wall Street is targeting a price of $1,049 or $1,099 versus the current $999 base price for the iPhone X.
A second phone with a 5.8-inch OLED display, likely called the iPhone Xs, would be similar to the iPhone X but with an improved processor.
But it is a third expected model with 6.1-inch display, potentially called the iPhone 9, that has intrigued analysts most. While some expect a $699 price for the iPhone 9, Goldman Sachs (NYSE:GS) analyst Rod Hall sees as much as $849, a significant bump for a mid-range device.
In addition to new models, Apple is also expected to unveil a gold-color option for the two new OLED-screened phones, a new version of its wireless Airpods earbuds with wireless charging and a new version of its Apple Watch with a bigger display. It also is expected to release a wireless charging mat that will be able to charge several devices at once.
Shares of Apple, which closed nearly 2.5% higher on Tuesday, added another 0.6% in pre-market trade.
2. U.S. Stocks Futures Tick Higher
At 5:50AM ET, the blue-chip Dow futures were up 29 points, or about 0.1%, the S&P 500 futures tacked on 3 points, or around 0.1%, while the tech-heavy Nasdaq 100 futures indicated a gain of 19 points, or roughly 0.25%.
U.S. stocks rose on Tuesday as a rebound in tech shares offset lingering concerns over trade.
Earlier, Asian markets fell to 14-month lows, led once again by weakness in China. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3%, plumbing its lowest levels since July 2017.
The mood was dimmed by the verbal sparring between Washington and Beijing as the months-long escalation in trade tensions between the world’s two biggest economies took its toll on riskier assets.
3. PPI Data Ahead
Today’s calendar will bring investors the August data on producer prices at 8:30AM ET. The data is expected to show prices rose 3.2% over the prior year, as signs of inflation pressures building in the economy continue to add up.
The Fed also releases its beige book on the economy at 2PM ET.
The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was a shade higher at 95.10.
4. EIA’s Weekly Oil Supply Report
The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended September 7 at 10:30AM ET.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 8.6 million barrels last week.
U.S. West Texas Intermediate WTI crude futures were at $69.56 per barrel, up 34 cents, or 0.5%, from their last settlement.
International Brent crude oil futures were at $78.86 per barrel, 18 cents, or 0.2%, lower from their last close.
Crude prices were also pushed up by Hurricane Florence offshore the United States amid surging demand for gasoline and diesel. The storm is expected to make landfall on the U.S. East Coast on Friday, and has caused fuel shortages as millions of households and businesses have evacuated.
5. Cryptocurrencies Crash… Again
Cryptocurrency prices continued to crash, as investor sentiment was shaken amid intensifying scrutiny of the digital tokens.
Bitcoin, the world’s most valuable digital currency was down around 2% at $6,244.50 on the Bitfinex exchange, after falling to as low as $6,170.00, a level last seen on August 22.
Beyond Bitcoin, the price of the other major cryptocurrencies also continued to drop.
Ethereum, the world’s second largest cryptocurrency by market cap, was down 11.8% at $171.25, its worst level since July 2017.