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Top 5 Things to Know in the Market on Thursday

Published 09/05/2019, 10:40
Updated 09/05/2019, 12:02
© Reuters.

Investing.com - Here are the top five things you need to know in financial markets on Thursday, May 9:

1. Trade talks start after Trump says China “broke the deal”

Two days of high level trade negotiations between China’s Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will kick off on Thursday amid escalating tension.

U.S. President Donald Trump announced this week that tariffs on Chinese imports will be increasing on Friday because negotiations were going too slowly and Beijing was not fulfilling commitments.

At a late rally in Florida on Wednesday, Trump insisted that China “broke the deal” and promised that the U.S. “won't back down until China stops cheating our workers and stealing our jobs."

China’s Commerce Ministry responded that escalation of trade friction was not in the interest of the two countries or the world, but promised to retaliate if the U.S. moved forward with increased tariffs.

Trade tensions overshadowed Chinese inflation data released overnight. The consumer price index accelerated at its fastest pace in six months in April as a growing swine fever epidemic pushed up pork prices. Prices at the factory gate also rose at the fastest pace in four months, boosted by higher commodity prices.

2. Trade tensions keep tight hold on global stocks

Global stocks declined for a fourth consecutive session Thursday as the trade standoff between the U.S. and China convinced market participants to take risk off the table.

Chinese shares led the decline with the Shanghai Composite closing down 1.5%, while Japan’s Nikkei 225 was off 0.9%.

European shares, as measured by the Euro Stoxx 50, also declined around 1%.

Despite a mixed close in the prior session, far from intraday lows, U.S. futures pointed to a further leg down. Dow futures sank 207 points, or 0.8% by 5:39 AM ET (0939 GMT), while S&P 500 futures fell 23 points, or 0.8%, and Nasdaq 100 futures traded down 72 points, or 0.9%.

3. Disney slips despite an upbeat report

Although Walt Disney (NYSE:DIS) reported better-than-expected numbers on the top and bottom lines after the prior market close, shares dipped 0.2% in premarket trading.

Theme parks helped in the quarter and the company is now riding high on the success of “Avengers: Endgame” and on expectations for its new streaming service Disney+.

Despite the positive numbers, much of the good news was already priced into the stock, which has risen more than 17% in the last month.

With 85% of S&P 500 firms having reported earnings, the season has not turned out as dire as feared. “Not even close to an earnings or sales recession this quarter as many (not us) predicted,” analysts at The Earnings Scout noted.

Before Thursday’s opening bell, Duke Energy (NYSE:DUK), Cardinal Health (NYSE:CAH) and Keurig Dr Pepper (NYSE:KDP) will report results.

4. Fed Chair Powell to speak alongside inflation data

Federal Reserve Chairman Jerome Powell will speak ahead of trading with markets on the lookout for any hints towards plans for monetary policy

Powell will give the opening remarks at a Fed conference on "Renewing the Promise of the Middle Class" in Washington at 8:30 AM ET (12:30 GMT).

The conference begins as the producer price index for April hits the wires along with weekly jobless claims. Prices at factory gates are expected to tick higher on an annualized basis. The Fed cited muted inflation as one of the key reasons for its expectations that it will not hike rates this year. Policymakers will have more insight with Friday’s release of consumer inflation data.

Chicago Fed President Charles Evans will speak at the same conference at 1:15 PM ET (1715 GMT).

At 10:45 AM ET (14:45 GMT), Atlanta Fed President Raphael Bostic will discuss monetary policy and the economic outlook at the Louisiana Bankers Association's 119th Annual Convention in New Orleans.

5. Uber set to price IPO

Uber (NYSE:UBER) is expected to price its long-awaited initial public offering after the market close on Thursday.

Although the ride-hailing company had set its expected range last month at $44 to $50, people familiar with the matter told The New York Times that it would set the price at or below the midpoint, or $47 a share, valuing the company at roughly $86 billion.

That's below the $100 billion that Uber had forecast last month, but the price tag still tops the $76 billion valuation at its most recent private fund-raising last August.

That price would also make it the largest IPO since Alibaba (NYSE:BABA) in 2014, and the largest by an American company since Facebook (NASDAQ:FB) in 2012.

Read more: ‘Temporary IPO Insanity’ Returns To Wall Street - Jesse Felder

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