Morning Market Briefing – Bennett McDowell 9/5/2018

U.S. stock futures were pointing to a lower open on Wall Street. The first trading day of September on Tuesday got off to a similar negative start, but the Dow, S&P 500, and Nasdaq all finished well off their session lows.

Trade concerns were hampering stocks, as the U.S. and Canada resume talks today after failing on Friday to bring them into the U.S.-Mexico deal. Canadian Prime Minister Justin Trudeau said Tuesday, “No NAFTA is better than a bad NAFTA deal for Canadians.” President Donald Trump also threatens to walk away, despite pushback from Congress and business groups
Dow stock Caterpillar (CAT) is rated buy in resumed coverage of the machinery sector at Deutsche Bank, which cites compelling valuations and favorable credit cycle trends.

Amazon (AMZN) briefly became the second publicly traded company after Apple (AAPL) to reach $1 trillion in market value. But it closed below the magic number and was under some pressure this morning.
• The government released July trade figures at 8:30 a.m. ET. The Mortgage Bankers Association said home loan applications overall were little changed last week and refis were off 1 percent.
• Tariff effects are still hard to isolate in the nation’s data but the consensus for July’s international trade balance is a sharp widening in the deficit, to $50.2 billion following $46.3 billion in June and a second-quarter average of $45.2 billion.
• It’s a busy day for Fed speeches, featuring St. Louis Fed President James Bullard, New York Fed President John Williams, Minneapolis Fed President Neel Kashkari, and Atlanta Fed President Raphael Bostic.

U.S. oil prices extended their losses today, falling towards $68 per barrel as Tropical Storm Gordon hit the Gulf coast and weakened, offsetting support from forecasts of lower U.S. inventories and sanctions against Iran.

In Asia, the indexes closed down at the end of the day’s trading, with the Hang Seng having fallen the most, by 2.61%. The MSCI Asia Pacific Index fell for a fifth day, sliding 1.5 percent, while Japan’s Topix index closed 0.8 percent lower.

In current trading, the European indexes are on a downward turn, with the CAC 40 falling most, by 0.82%. the Stoxx 600 Index was 1.0 percent lower at 5:45 a.m. Eastern Time, with Italy’s FTSE MIB the only national benchmark gauge in the region posting a gain.