Investing.com - Here are the top five things you need to know in financial markets on Tuesday, June 4:
1. Fed Chair Powell to speak as hopes for rate cut grow
While U.S. President Donald Trump’s tariff policies have escalated concerns over the risk of a global recession, markets have increasingly become convinced that the Federal Reserve will need to react with looser monetary policy in order to support the American economy.
St. Louis Fed President James Bullard boosted those hopes on Monday when he said that unresolved trade disputes and below-target inflation “suggest that the (Fed) needs to tread carefully in order to help sustain the economic expansion” and indicated that a rate cut could be warranted.
He’s the first Fed policy-maker to go that far. Fed Chairman Jerome Powell will have a chance to chime in with his latest viewpoint at 9:45 AM ET (13:45 GMT) when he speaks at a conference organized by the Chicago Fed.
Several other Fed members will also be speaking at the two-day conference.
On Tuesday’s data calendar, factory orders for April will be released at 10:00 AM ET (14:00 GMT).
2. Global stocks mixed as tech woes spread
Regulatory fears over the U.S. tech sector that sent the Nasdaq sharply lower in the previous session sent waves through Asian markets on Tuesday.
The Shanghai Composite led indices lower, closing down 1%.
Australia’s S&P/ASX 200 bucked the general trend, ending up 0.2%, after the country’s central bank cut its benchmark rate for the first time in nearly three years to an all-time low of 1.25%.
The first signs of U.S. antitrust action against major internet companies also sent shockwaves through European tech companies, but markets were supported by growing hopes for relief from central banks. The pan-European Euro Stoxx 50 gained 0.4% ahead of Thursday’s monetary policy decision from the European Central Bank.
U.S. futures pointed to a recovery at the open on Tuesday as investors bet that Fed policymakers will soften their stance. Dow futures gained 128 points, or 0.5%, by 6:09 AM ET (10:09 GMT), S&P 500 futures rose 14 points, or 0.5%, while Nasdaq 100 futures traded up 44 points, or 0.6%.
3. Trump talks up U.K. trade deal
U.S. President Donald Trump talked up the possibility a “bilateral trade agreement” between the U.S. and U.K. after the latter leaves the European Union.
Trump made clear this week that he believes the U.K. should walk away from negotiations with the European Union over its departure from the bloc if it can’t get a fair deal. The negotiations have, however, already ended and EU officials have said they won’t reopen them.
Local media reports indicated that Trump had privately urged May to take a tougher line on Chinese telecoms giant Huawei, after the U.K. government decided not to ban its equipment from the country’s 5G networks.
4. Analysts free to speak on UBER as quiet period ends
Dozens of analysts that have been gagged by industry practice will be free to speak their mind about Uber (NYSE:UBER) from today.
Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) are just some of the investment banks that underwrote the company’s market debut on May 9 and were thus barred from covering the stock until the quiet period lifts on Tuesday. The shares have lost nearly 10% since then.
According to Refinitiv data reported by Reuters, three analysts not involved in the underwriting already issued a buy recommendation with five others giving neutral ratings.
5. Oil heads lower on demand worries, U.S. inventories ahead
Oil prices fell as an economic slowdown started to dent energy demand and investors turn their attention to weekly inventory data.
With concerns mounting that ongoing Sino-U.S. trade tensions will heighten a global economic slowdown, including the potential risk of recession, analysts commented that risks could dent oil demand.
Read more: Can OPEC Rise Above Trade Wars 'Noise,' Macro Threats To Oil Demand? - Barani Krishnan