Daily Market View

A rout on Wall Street deepened yesterday after news of the arrest of a top executive at Chinese telecommunications giant Huawei stoked fears it could hinder progress in U.S.-China trade talks. The Dow dropped more than 600 points, or 2.4 percent, in early trading. The decline represents a continuation of Tuesday’s 800-point plunge in the blue-chip index before trading was closed Wednesday in observance of a national day of mourning for former President George H.W. Bush. Other indices also lost ground yesterday. The S&P 500 index fell more than 1 percent, while the tech-heavy NASDAQ index slipped 0.8 percent. The news of Huawei CFO Meng Wanzhou’s arrest sent shares sharply lower on fears of rising tensions between China and the U.S. The incident heightens concerns that the trade truce between President Donald Trump and his Chinese counterpart Xi Jinping won’t hold, pushing the two economic powers into a trade war. Meanwhile, oil prices dropped as OPEC countries gathered yesterday for a two-day meeting.

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The Dow Jones Industrial Average declined 0.32%. The best performers of the session on the Dow Jones Industrial Average were Cisco Systems Inc., which rose 2.20% or 1.04 points to trade at 48.39 at the close. Meanwhile, International Business Machines added 1.90% or 2.31 points to end at 123.91 and Visa Inc. was up 1.74% or 2.41 points to 141.05 in late trade. The worst performers of the session were Boeing Co, which fell 3.09% or 10.60 points to trade at 331.90 at the close. JPMorgan Chase & Co declined 1.90% or 2.04 points to end at 105.19 and Exxon Mobil Corp was down 1.31% or 1.04 points to 78.39.

NASDAQ 100

The NASDAQ index gained 0.42%. The top performers on the NASDAQ were TheStreet Inc. which rose 35.53% to 2.060, Uxin Ltd which was up 31.47% to settle at 3.76 and Remark Holdings Inc. which gained 31.39% to close at 1.800. The worst performers were Conatus Pharmaceuticals Inc. which was down 56.89% to 1.940 in late trade, Tonix Pharmaceuticals Holding Corp which lost 25.36% to settle at 3.150 and Hexindai Inc. which was down 25.33% to 2.24 at the close.

Oil

Oil prices tumbled about 3 percent yesterday as OPEC reportedly agreed to cut production, but ended its closely-watched meeting without a decision on how much crude the cartel will take off the market. OPEC agreed in principle to cut production during a meeting at its headquarters in Vienna, Austria yesterday, two sources told Reuters. However, the cartel delayed a decision on specific quotas until it consults Russia today. OPEC began capping supply in partnership with Russia and several other nations last year in order to end a punishing downturn in oil prices. However, Moscow has not yet specified how much it will cut production during the fresh round of supply caps that is now under consideration. U.S crude oil ended yesterday’s session down $1.40, or 2.7 percent, at $51.49, bouncing from a session low of $50.08. Oil prices briefly pared losses after government data showed U.S crude stockpiles fell by 7.3 million barrels in the week through Nov. 30. Oil prices have fallen more than 30 percent over the last two months.

Gold prices edged lower yesterday in range-bound trade as investors booked profits and the dollar strengthened, while palladium fell from a record high hit in the previous session. Spot gold fell 0.2 percent to $1,235.57 per ounce, while U.S gold futures were 0.1 percent lower at $1,240.8 per ounce. Gold has been near key levels of $1,240, so there might be some technical-level profit-taking. A meeting of the Organization of the Petroleum Exporting Countries (OPEC) and U.S nonfarm payroll data expected on Friday are keeping gold investors on guard. U.S Federal Reserve policymakers are to gather at a Dec. 18-19 meeting, at which the central bank is widely expected to raise interest rates. Although a rate hike is already priced in, markets will be closely watching the meeting for clues on rate-hike timings in 2019. The dollar held steady as a spike in risk aversion pressured equities and U.S. Treasury yields. The spread between the two-year and five-year Treasury yields inverted this week and the two-year/10-year spread was at its flattest in more than a decade amid a sharp fall in long-term rates. A yield curve inversion indicates higher borrowing cost in short term, so for safe-haven assets in the longer run it’s going to be very positive. Meanwhile, palladium prices stayed near gold’s after outshining the yellow metal for the first time since 2002 on Wednesday, with prices soaring by around 50 percent in less than four months to record levels. Spot palladium dropped 2.3 percent to $1,215.43 per ounce, still hovering near its record high hit in the previous session. The market now awaits today’s U.S nonfarm payrolls data for November, which is expected to show unemployment remains at 3.7 percent. Investors are seen adopting a cautious stance ahead of the U.S jobs report which could offer insight over the health of the U.S labor force. Amongst other metals, silver fell 0.9 percent to $14.37 per ounce.

Traditional Agricultures

Soybean futures fell for the first time in five sessions yesterday. Corn followed soybeans lower, although declines were largely offset by solid export demand. Wheat was pressured by muted export demand as rival suppliers such as Russia continue to challenge U.S grain in global markets.

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