Economic data have been picking up strength but this was not anticipated in today’s Federal Reserve Industrial Production report.
- A big drop in autos pulled industrial production lower in May, slipping 0.1 percent.
- Manufacturing volumes fell 0.7 percent, pulled down by a 6.5 percent monthly drop in motor vehicles that reflected the effects of a fire early in the month at a supplier in Michigan.
Today is a Quadruple Witching expiration. Quadruple witching days only occur four times a year. The last hour of these trading days, from 3:00 to 4:00 p.m. EST, is referred to as the quadruple witching hour.
- On quadruple witching days, and especially during quadruple witching hours, many investors attempt to unwind their futures and options positions before the contracts expire.
- On these days, market index futures, market index options, stock options and stock futures expire. This can result in increased volatility.
U.S. stocks opened lower this morning as the U.S.-China trade dispute intensified.
- President Trump announced tariffs on $50 billion worth of Chinese imports prompting Beijing to vow immediate retaliation.
World Markets overnight and this morning:
- The MSCI Asia Pacific Index lost 0.2 percent.
- Japan’s Topix index closed higher in the wake of the Bank of Japan decision to maintain stimulus.
- In Europe, the Stoxx 600 Index was 0.73 percent lower and the FTSE 100 was 1.07 percent lower.
- Moody’s reviews the U.K.’s credit rating.