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Global Stocks Waver as Investors Read Shifting Trade Talk Cues

Global stocks wavered Thursday as investors assessed conflicting signals on the prospects for the U.S.-China trade talks.

Futures tied to the Dow Jones Industrial Average swung between tepid gains and losses, a day after the gauge of U.S. blue-chip stocks logged its biggest fall of the month. Hong Kong’s benchmark Hang Seng Index ended the day down 1.6%, while the pan-continental Stoxx Europe 600 index retreated 0.5%, led by losses in sectors most exposed to the global economic impact of worsening trade tensions.

China’s chief trade negotiator late last week invited his American counterparts for a new round of face-to-face talks, according to people briefed on the matter, The Wall Street Journal reported Thursday. Chinese officials hope the negotiations can take place before the Thanksgiving holiday, but the U.S. side hasn’t committed to a date.

That report came less than a day after President Trump criticized China’s efforts to reach a trade agreement, escalating concerns that the world’s two biggest economies won’t reach a deal this year.

“The market really doesn’t know what leg to stand on at this stage,” said Ole Hansen, head of commodity strategy at Saxo Bank. “We have this roller coaster, or hamster wheel, on trade.”

While visiting Apple Inc.’s Texas plant on Wednesday, Mr. Trump said China isn’t “stepping up” to the level he wants for the two sides to reach a deal. That is further dimmed hopes that had already been diminishing after Mr. Trump’s threats in recent days to raise tariffs further. The two sides so far have struggled to reach an accord on specific commitments from China regarding the purchase of U.S. agricultural products and the White House paring back existing levies.

While hopes fade for a resolution in coming weeks to a trade war that has weighed on the global economic outlook, investors aren’t likely to see any relief from a quick-paced easing in U.S. monetary policy. Federal Reserve officials said little about what would prompt them to resume interest-rate cuts when they signaled a pause following last month’s rate reduction, according to minutes of the policy meeting released Wednesday.

“Markets have been climbing on hopes of a trade resolution and easier monetary policy,” said Russ Mould, investment director at asset-management company AJBell. “Now the trade news was negative overnight from China, and the Fed minutes were disappointing insofar as they signaled a wait-and-see approach.”

Adding to strains between the two nations, Beijing on Wednesday summoned the highest-ranking U.S. diplomat in the capital to object to Washington’s support for Hong Kong protesters after the House of Representatives passed legislation Wednesday requiring the U.S. to re-examine its relationship with Hong Kong. That put formal American support for the pro-democracy protests in the hands of Mr. Trump.

Ahead of the U.S. opening bell, shares in Charles Schwab rose 7.3% in premarket trading after CNBC reported that the brokerage is in talks to buy TD Ameritrade Holding, and a deal could be announced as early as Thursday. TD Ameritrade climbed over 22%.

Shares in Tiffany rose more than 3.5% following a Reuters report that LVMH Moët Hennessy Louis Vuitton SE has gained access to the jewelry retailer’s books after it improved its offer to almost $130 per share, or nearly $16 billion.

Among European equities, German steelmaker Thyssenkrupp was among the biggest losers. The stock dropped 10%–putting it on track for its worst decline in over three years — after it said Thursday that its 2019 loss had widened, and that restructuring costs would likely cause a bigger loss next fiscal year.

Shares in Royal Mail dropped 16% after the company warned that its U.K. business could be loss-making next year.

Later in the day, investors will have a further opportunity to gauge the Fed’s views on the economy and monetary policy when Minneapolis Fed President Neel Kashkari and Cleveland Fed President Loretta Mester give speeches.

The Labor Department is also scheduled to release data on jobless claims, offering a signal on the strength of the U.S. employment market. Separately, the National Association of Realtors will release figures on sales of existing homes, which will likely be parsed by investors for signs of a pick up in the muted housing market.
Source: Dow Jones

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