Opening Bell: Dismal Data, Trade Gridlock On Farm Purchases Spur Risk Off

• U.S. futures, European shares drop on downbeat economic data, lingering trade frictions
• Yields slip, gold climbs on risk off
• Oil price surges on Trump's Syria remarks

Key Events

European stocks and futures on the S&P 500, Dow and NASDAQ 100 retreated this morning on dismal global growth data and signs of lingering friction between U.S. and Chinese negotiators.

U.S. contracts gave up Wednesday’s fresh records by the S&P 500 and the Dow—helped by Walt Disney's (NYSE:DIS) stock surge following the debut of the media and entertainment group's streaming service—while Europe's STOXX 600 extended a decline with auto makers shares, despite third-quarter data showing euro-area growth continued to—narrowly—avoid a recession.

In the earlier Asian session, stocks on Hong Kong’s Hang Seng (-0.93%) and Tokyo’s Nikkei 225 (-0.76%) extended losses after China’s factory output, retail sales and fixed-asset investment all missed estimates and fresh figures revealed Japan’s economy slowed sharply in the third quarter.

Shares on China’s Shanghai Composite (+0.16%), Seoul’s KOSPI (+0.79%) and Sydney’s S&P/ASX 200 (+0.55%) still managed to inch higher.

Global Financial Affairs

Russell 2000 Daily Chart

Yesterday, the Russell 2000 fared as the only U.S. major to drop, blowing out a bullish pennant with a MACD sell signal.

The S&P 500's second day climb in particular brought the index's rally to over 7% for the month—a surge driven by trade hopes, receding recession concerns and three consecutive Fed cuts.

Meanwhile, as earnings season comes to a close, Cisco Systems (NASDAQ:CSCO) slid after hours as its sales forecast disappointed expectations, as we had forecast.

The overall technology sector whipsawed on news that U.S. and Chinese negotiators are still at odds over agricultural purchases.

UST 10-Year Daily Chart

On Thursday, risk off increased demand for Treasurys, pushing 10-year yields lower for the second session after finding resistance at the top of a short-term rising channel, below the 200 DMA. At present, rates are precisely on the long-term downtrend line since November 2018, after scaling above it for the first time one week ago.

The Dollar Index fell for the first time in three sessions, even as the euro slipped for the third straight day after German growth figure showed the country only narrowly dodged recession.

XAU/USD Daily Chart

Gold climbed for the third day on both USD weakness and risk off. Technically, the precious metal is correcting on profit-taking within a falling channel.

WTI Daily Chart

Oil hit the highest price since Sept. 23 after President Donald Trump said U.S. troops are in Syria “only for the oil.” The International Energy Agency forecast WTI will jump to $90 a barrel. Technically, the commodity is facing the resistance of a congestion after reaching the top of a short-term rising channel this month. From a fundamentals perspective, some analysts are drawing attention to the risk that U.S. shale production may be plateauing.

Up Ahead

• Earnings season is coming to an end, with NVIDIA's (NASDAQ:NVDA) results expected after market close.
• Fed Chairman Jerome Powell's two-day testimony before the Joint Economic Committee of Congress continues in Washington on Thursday.
• U.S. retail sales, released on Friday are forecast to have rebounded in October, after unexpectedly falling the prior month.

Stocks

Currencies

• The Dollar Index retreated 0.05%.

• The euro gained 0.1% to $1.1013.

• The Japanese yen inched 0.1% higher to 108.70 per dollar.

Bonds

• Britain’s 10-year yield slid two basis points to 0.739%.

Commodities