26Jul2018 Pre-Market Commentary: EU-USA Trade Deal And Facebooks Weak Guidance Rattles Investors

Written by Gary

Most USA markets are predicted to open higher based on news of a trade war stopping deal between the EU and USA. Details of the deal are sketchy. However, Facebook will be a drag on the market based on earnings guidance for privacy costs.

Here is the current market situation from CNN Money
	European markets are broadly higher today with shares in Germany leading the region. The DAX is up 1.38% while France’s CAC 40 is up 0.69% and London’s FTSE 100 is up 0.03%.

What Is Moving the Markets

Here are the headlines moving the markets.
	Qualcomm ends $44 billion NXP bid after failing to win China approval Qualcomm Inc walked away from a $44 billion deal to buy NXP Semiconductors after failing to secure Chinese regulatory approval, becoming a high profile victim of a bitter Sino-U.S. trade spat.
	Trump relents on EU car tariffs, as U.S.-China fight derails Qualcomm deal In what the EU chief called a “major concession,” U.S. President Donald Trump agreed on Wednesday to refrain from imposing car tariffs while the two sides launch negotiations to cut other trade barriers, easing the threat of a transatlantic trade war.
	Germany welcomes U.S.-EU trade reprieve as step in right direction Germany welcomed an initiative agreed between U.S. President Donald Trump and the head of the European Commission to ease the threat of a trade war and shares rose on the news, but business groups urged the two sides to back up their words with deeds.
	Britain welcomes U.S.-EU pledge to lower trade barriers Britain welcomed an initiative agreed between U.S. President Donald Trump and European Commission President Jean-Claude Juncker to cut trade barriers, easing the threat of a transatlantic trade war.
	Facebook’s grim forecast: privacy push will erode profits for years Facebook Inc’s shares lost as much as a quarter of their value on Wednesday after executives said that profit margins would plummet for several years due to the costs of improving privacy safeguards and slowing usage in the biggest advertising markets.
	NXP to repurchase $5 billion shares after Qualcomm deal falls through NXP Semiconductors NV , whose buyout deal with U.S. chipmaker Qualcomm Inc fell through due to lack of approval from China, said on Thursday it would buy back $5 billion worth of shares.
	World stocks hit four-month high on EU-U.S. trade breakthrough hopes European stocks opened much higher on Thursday, pushing world stocks to new four-month highs after the European Union and the United States agreed to negotiate on trade, easing some of the fears of a transatlantic trade war.
	Germany’s VDA says U.S.-EU trade progress is a ‘big step forward’ Germany’s VDA automotive association welcomed on Thursday an agreement between the EU and the United States to take steps to ease the threat of a transatlantic trade war, saying it offered a real opportunity to avert further tariffs.
	Toyota plans to expand production, shrink cost of hydrogen fuel cell vehicles Toyota Motor Corp is doubling down on its investment in hydrogen fuel cell vehicles, designing lower-cost, mass-market passenger cars and SUVs and pushing the technology into buses and trucks to build economies of scale.
	Bomb Explodes Outside US Embassy In Beijing A bomb exploded outside the U.S. embassy in Beijing on Thursday, wounding the lone assailant, the embassy said in a statement, but police described the weapon merely as a “firecracker” according to Reuters. The explosion happened on the street outside southeast corner of the embassy compound, the embassy said. A 26-year-old man from China’s northern region of Inner Mongolia detonated an explosive device around 1 p.m., the Beijing Municipal Public Security Bureau said on its official Weibo social media account. The man was being treated in a hospital for a non-life-threatening injury, Bloomberg reported . Chinese Ministry of Foreign Affairs spokesman Geng Shuang said the case had been properly handled by local police. “It is an isolated case of public security,” Geng said.
	Republicans Begin Impeachment Proceedings Against Rosenstein House GOP members led by Freedom Caucus Chairman Mark Meadows (NC) have filed formal articles of impeachment against Deputy Attorney General Rod Rosenstein, according to a late Wednesday announcement by Meadows over Twitter. I just filed a resolution with @Jim_Jordan and several colleagues to impeach Rod Rosenstein. The DOJ has continued to hide information from Congress and repeatedly obstructed oversight–even defying multiple Congressional subpoenas. We have had enough. — Mark Meadows (@RepMarkMeadows) July 25, 2018 News of the resolution comes after weeks of frustration by Congressional investigators, who have repeatedly accused Rosenstein and the DOJ of “slow walking” documents related to their investigations. Lawmakers say they’ve been given the runaround – while Rosenstein and the rest of the DOJ have maintained that handing over vital documents would compromise ongoing investigations.
	Brexit Is Killing London’s Housing Boom Authored by Alex Kimani via Safehaven.com, After running for almost a decade, London’s housing boom may be on its final legs. That is the message being constantly sent by data by new building starts as well as the number of unsold homes under construction, with both metrics steadily rising over the past year. About 46 percent of the city’s 68,000 partly built and completed homes have yet to find a buyer.
	Facebook Plunges Into Bear Market, Wipes Out $132 Billion In Value Update 2: Well that escalated quickly: FB is now down over 20% from its closing highs, losing over $130 billion in market value and erasing all of post-Q1 earnings gains, making Mark Zuckerberg $16 billion poorer, and officially entering a bear market. Nasdaq is trading down 1.5%…
	Google’s Costly Traffic Jam Eases The internet giant’s strong results help offset growing worries about costs and political risks.
	China Stimulates Again, but Don’t Expect Fireworks China analysts have spent the past three months arguing about whether Beijing will stimulate the economy as growth slows. The answer is now apparent, but what does that mean for markets?
	June 2018 Philly Fed Coincident Index Year-over-Year Rate of Growth Declined The year-over-year rate of growth relative to the previous month of the US Coincident Index slightly declined. A comparison of this US Coincident Index to other coincident indices follows.
	Early Headlines: Asia Stocks Mixed, Dollar Down, Oil Up, Gold Flat, Trump-Cohen Tape, Rosenstein Impeachment, Trump Foundation, Malls Dying, EU Slowdown, Zero Tariffs, Brexit String Along, Korean War Treaty, And More Written by Econintersect Early Bird Headlines 26 July 2018 Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, published Monday, Wednesday and Friday, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
	Asia Markets: Asian markets mixed, as Eisai weighs down Nikkei Trading was mixed in Asia-Pacific stock markets Thursday, as slight declines in Australia, China, Hong Kong and Japan were offset by bigger gains in the region’s emerging markets like South Korea, Indonesia and Singapore.
	Market Snapshot: U.S. stock futures mostly fall, hit by Facebook’s premarket dive U.S. stock-index futures mostly point to a drop at the open Thursday, led lower by Facebook’s big premarket fall after its disappointing quarterly report.
	Market Extra: It’s this number from abroad — and not the ECB update — that will likely drive the euro The European Central Bank policy update is on deck for Thursday, but little new is expected from ECB president Mario Draghi. Instead, euro traders are looking to Friday’s U.S. GDP numbers as a potential driver for the shared currency.