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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/oct/12/stock-markets-bounce-losses-ftse-asia-wall-street-business-live
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| Stock markets stabilise after week of heavy losses - business live | Stock markets stabilise after week of heavy losses - business live |
| (35 minutes later) | |
| The rally in London has petered out. | |
| The FTSE 100 has closed 11 points lower at 6995.91, a dip of 0.16%. That takes it to a new six-month low, and deeper into a correction. | |
| Still, it’s a rather smaller loss than on in recent days. | |
| The European stock market rally is running out of steam! | The European stock market rally is running out of steam! |
| After a strong start, the major indices are heading back to earth as the closing bell approaches. | After a strong start, the major indices are heading back to earth as the closing bell approaches. |
| The FTSE 100 is now up only 9 points, or 0.1%. Germany and France are also subsiding. | The FTSE 100 is now up only 9 points, or 0.1%. Germany and France are also subsiding. |
| David Madden of CMC Markets thinks traders are keen to protect themselves from any more volatility on Wall Street tonight (where stocks are still higher) | David Madden of CMC Markets thinks traders are keen to protect themselves from any more volatility on Wall Street tonight (where stocks are still higher) |
| The equity markets got off to a strong start following a mixed session in Asia, but now the gains are evaporating as we approach the close. Traders are keen to square up their books ahead of the weekend. The global equity rout originated in the US, and the moves continue to be US driven, and European dealers are keen to cash in their holdings as Wall Street still has several hours more trading left. | The equity markets got off to a strong start following a mixed session in Asia, but now the gains are evaporating as we approach the close. Traders are keen to square up their books ahead of the weekend. The global equity rout originated in the US, and the moves continue to be US driven, and European dealers are keen to cash in their holdings as Wall Street still has several hours more trading left. |
| The pound has lost ground today, as traders continue to watch Brexit developments nervously. | The pound has lost ground today, as traders continue to watch Brexit developments nervously. |
| The UK government is currently trying to reassure sceptical MPs, and ministers, over a proposed backstop arrangement that could effectively keep the whole UK inside the customs union. | The UK government is currently trying to reassure sceptical MPs, and ministers, over a proposed backstop arrangement that could effectively keep the whole UK inside the customs union. |
| Downing Street insists that it would never agree to an ‘indefinite’ backstop, in an attempt to placate Brexit-supporting MPs who insist on a clean break with the EU. | Downing Street insists that it would never agree to an ‘indefinite’ backstop, in an attempt to placate Brexit-supporting MPs who insist on a clean break with the EU. |
| But with time running out, the pound has lost half a cent against the US dollar to $1.318. | But with time running out, the pound has lost half a cent against the US dollar to $1.318. |
| Ursula Johnston, head of customs, Gowling WLG, warns that such an arrangement may not would actually deliver frictionless trade. That’s a crucial issue, as the government begins work on turning motorways in Kent into parking lots for lorries after Brexit... | Ursula Johnston, head of customs, Gowling WLG, warns that such an arrangement may not would actually deliver frictionless trade. That’s a crucial issue, as the government begins work on turning motorways in Kent into parking lots for lorries after Brexit... |
| She explains: | She explains: |
| The UK newspapers are filled today with reports of Theresa May closing in on a deal with the EU whereby the whole of the UK would remain in “a”, or, “the” customs union with the EU for an indefinite period. This is on the face of it promising news for those that would like the UK to keep the closest possible trading ties with the EU without being a member of the Single Market. The concept of a UK – EU customs union seems to offer the holy grail of frictionless trade and providing a workable solution to the Irish border conundrum. | The UK newspapers are filled today with reports of Theresa May closing in on a deal with the EU whereby the whole of the UK would remain in “a”, or, “the” customs union with the EU for an indefinite period. This is on the face of it promising news for those that would like the UK to keep the closest possible trading ties with the EU without being a member of the Single Market. The concept of a UK – EU customs union seems to offer the holy grail of frictionless trade and providing a workable solution to the Irish border conundrum. |
| However what has not been clarified, as yet, is whether the UK would remain part of the Customs Union and trade with the EU-27 as it does today i.e. no customs administrative requirements or whether the UK will form a new customs union with the EU. Should the UK and EU agree on a new customs union arrangement with the EU this will eliminate tariffs but does not mean no customs administration and paperwork. There will highly likely still be a requirement to file a declaration that the goods are in UK or EU free circulation and provide a customs value and classification for those goods. This is not frictionless trade as some would no doubt envisage. It offers a trading arrangement for customs purposes that is closer to a free trade agreement without delivering any of the wider benefits. | However what has not been clarified, as yet, is whether the UK would remain part of the Customs Union and trade with the EU-27 as it does today i.e. no customs administrative requirements or whether the UK will form a new customs union with the EU. Should the UK and EU agree on a new customs union arrangement with the EU this will eliminate tariffs but does not mean no customs administration and paperwork. There will highly likely still be a requirement to file a declaration that the goods are in UK or EU free circulation and provide a customs value and classification for those goods. This is not frictionless trade as some would no doubt envisage. It offers a trading arrangement for customs purposes that is closer to a free trade agreement without delivering any of the wider benefits. |
| Bernardine Adkins, head of EU trade and competition law, Gowling WLG, is more scathing about the government’s plans: | Bernardine Adkins, head of EU trade and competition law, Gowling WLG, is more scathing about the government’s plans: |
| The guidance published today is pure fantasy. The government say that they will “seek to bring into force bilateral UK-third country agreements from exit day, or as soon as possible thereafter”. There is no mention that the UK is currently unable to negotiate bilateral deals, so there is absolutely no possibility of bilateral agreements being in place on exit day. Worse still ‘as soon as possible thereafter’ will be the time it takes to negotiate deals – this is at least 5 years if not longer. That’s at least 5 years in which UK businesses will face increased costs for customs clearance and compliance. | The guidance published today is pure fantasy. The government say that they will “seek to bring into force bilateral UK-third country agreements from exit day, or as soon as possible thereafter”. There is no mention that the UK is currently unable to negotiate bilateral deals, so there is absolutely no possibility of bilateral agreements being in place on exit day. Worse still ‘as soon as possible thereafter’ will be the time it takes to negotiate deals – this is at least 5 years if not longer. That’s at least 5 years in which UK businesses will face increased costs for customs clearance and compliance. |
| Today’s guidance on free trade agreements is telling. It grossly underestimates the time it takes to negotiate free trade deals, and glibly notes that ‘there may be practical changes’ to how current users of EU free trade agreements will deal with third countries. Importantly, however, the government has dropped its fantastical stance of simply rolling over EU free trade agreements on exit day. The problem is that there is no viable option to avoid increased tariffs or other impediments to trade in a no deal scenario. | Today’s guidance on free trade agreements is telling. It grossly underestimates the time it takes to negotiate free trade deals, and glibly notes that ‘there may be practical changes’ to how current users of EU free trade agreements will deal with third countries. Importantly, however, the government has dropped its fantastical stance of simply rolling over EU free trade agreements on exit day. The problem is that there is no viable option to avoid increased tariffs or other impediments to trade in a no deal scenario. |
| BREAKING: Stocks open sharply higher on Wall Street following a two-day rout; Dow industrials jump almost 400 points. | BREAKING: Stocks open sharply higher on Wall Street following a two-day rout; Dow industrials jump almost 400 points. |
| Ding Ding! The opening bell of Wall Street is ringing out, setting us up for a strong open. | Ding Ding! The opening bell of Wall Street is ringing out, setting us up for a strong open. |
| The Dow Jones industrial average has jumped by 1.5%, or over 360 points. That follows two days of big losses that wiped out almost 1,400 points. | The Dow Jones industrial average has jumped by 1.5%, or over 360 points. That follows two days of big losses that wiped out almost 1,400 points. |
| The S&P 500 is also up around 1.5%. | The S&P 500 is also up around 1.5%. |
| The tech-focused Nasdaq index is rallying hard too, up almost 2.5%. | The tech-focused Nasdaq index is rallying hard too, up almost 2.5%. |
| After six days of losses, New York is trying to end this week on the front foot. | After six days of losses, New York is trying to end this week on the front foot. |
| Financial stocks are among the top risers, after decent results from JP Morgan, Citi and Wells Fargo earlier today. | Financial stocks are among the top risers, after decent results from JP Morgan, Citi and Wells Fargo earlier today. |
| Stephen Mnuchin has also played down the suggestion that China could dump its holdings of US government debt. | Stephen Mnuchin has also played down the suggestion that China could dump its holdings of US government debt. |
| He claimed such a move would be costly for Beijing, and that there’d be plenty of other buyers anyway. | He claimed such a move would be costly for Beijing, and that there’d be plenty of other buyers anyway. |
| "It's not something I'm at all losing any sleep about," Treasury Sec. Steve Mnuchin says he isn't worried about China selling U.S. Treasurys in retaliation over trade. https://t.co/VGfPQGOO6v pic.twitter.com/UByWgWyZ2G | "It's not something I'm at all losing any sleep about," Treasury Sec. Steve Mnuchin says he isn't worried about China selling U.S. Treasurys in retaliation over trade. https://t.co/VGfPQGOO6v pic.twitter.com/UByWgWyZ2G |
| More soothing words, this time from US treasury secretary Stephen Mnuchin. | More soothing words, this time from US treasury secretary Stephen Mnuchin. |
| Asked about the markets, Mnuchin told CNBC that “markets tend to go too far in both directions” - suggesting he’s not too worried about this week’s losses. | Asked about the markets, Mnuchin told CNBC that “markets tend to go too far in both directions” - suggesting he’s not too worried about this week’s losses. |
| Mnuchin also insisted that the US economy was in good shape. arguing: | Mnuchin also insisted that the US economy was in good shape. arguing: |
| “The fundamentals are still very strong. | “The fundamentals are still very strong. |
| “The U.S. economy is strong. U.S. earnings are strong. I see this as just a natural correction after the markets were up a lot.” | “The U.S. economy is strong. U.S. earnings are strong. I see this as just a natural correction after the markets were up a lot.” |
| Unlike his boss, Mnuchin didn’t blame the Federal Reserve for the sell-off. | Unlike his boss, Mnuchin didn’t blame the Federal Reserve for the sell-off. |
| Asked about Trump’s criticism of Fed chair Jerome Powell, Mnuchin replied: | Asked about Trump’s criticism of Fed chair Jerome Powell, Mnuchin replied: |
| I think Jay is doing a good job. | I think Jay is doing a good job. |
| Maybe all is forgiven, now shares are are going up again.... | Maybe all is forgiven, now shares are are going up again.... |
| "I see this as just a natural correction after the markets were up a lot," Treasury Sec. Steve Mnuchin says fundamentals are "very strong." https://t.co/TREWuII7YW pic.twitter.com/86RrbaJXE9 | "I see this as just a natural correction after the markets were up a lot," Treasury Sec. Steve Mnuchin says fundamentals are "very strong." https://t.co/TREWuII7YW pic.twitter.com/86RrbaJXE9 |
| Financial titan JP Morgan has given the markets a boost, by releasing stronger financial results than expected. | Financial titan JP Morgan has given the markets a boost, by releasing stronger financial results than expected. |
| JP Morgan earned $2.34 per share in the last quarter, beating forecasts of $2.25 per share. | JP Morgan earned $2.34 per share in the last quarter, beating forecasts of $2.25 per share. |
| Revenues were 5% higher too, at $27.8bn, suggesting Wall Street is managing to navigate the choppy waters of 2018. | Revenues were 5% higher too, at $27.8bn, suggesting Wall Street is managing to navigate the choppy waters of 2018. |
| Jamie Dimon, Chairman and CEO, says: | Jamie Dimon, Chairman and CEO, says: |
| “JPMorgan Chase delivered strong results this quarter with top-line growth in each of our businesses, demonstrating the power of our platform. | “JPMorgan Chase delivered strong results this quarter with top-line growth in each of our businesses, demonstrating the power of our platform. |
| The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy.” | The U.S. and the global economy continue to show strength, despite increasing economic and geopolitical uncertainties, which at some point in the future may have negative effects on the economy.” |
| @jpmorgan releases better than expected results pre-market pic.twitter.com/4HQBuPYC2P | @jpmorgan releases better than expected results pre-market pic.twitter.com/4HQBuPYC2P |
| Wall Street traders have woken up in a better mood .... | Wall Street traders have woken up in a better mood .... |
| Futures extend gains, pointing to 400+ point jump on the Dow at the open, as Treasury Sec. Mnuchin tells CNBC that the two day sell-off was just a "natural correction" and the fundamentals of the economy remain strong https://t.co/KuI2jmCoN1 pic.twitter.com/V7tzaEdqAR | Futures extend gains, pointing to 400+ point jump on the Dow at the open, as Treasury Sec. Mnuchin tells CNBC that the two day sell-off was just a "natural correction" and the fundamentals of the economy remain strong https://t.co/KuI2jmCoN1 pic.twitter.com/V7tzaEdqAR |
| Stock markets in emerging economies are recovering some ground today, after suffering their biggest fall in two years on Thursday. | Stock markets in emerging economies are recovering some ground today, after suffering their biggest fall in two years on Thursday. |
| The MSCI index of developing market stocks has jumped by 2.2% today, led by Taiwan (up 2.4%), India (+2.1%), the Philippines (+1.75%) and South Korea (+1.5%). | The MSCI index of developing market stocks has jumped by 2.2% today, led by Taiwan (up 2.4%), India (+2.1%), the Philippines (+1.75%) and South Korea (+1.5%). |
| Here’s Reuters take: | Here’s Reuters take: |
| Those moves tracked a general improvement in appetite for risk among investors globally, with developed world stock markets recovering after a dramatic two-day slide on Wall Street. | Those moves tracked a general improvement in appetite for risk among investors globally, with developed world stock markets recovering after a dramatic two-day slide on Wall Street. |
| “We’re seeing a bit of a rebound in EM stock markets today...we saw a similar occurrence earlier this year when U.S.stocks came under pressure and that automatically improved, and that might be what we’re seeing this time around as well,” said Jason Tuvey, senior emerging markets economist at Capital Economics. | “We’re seeing a bit of a rebound in EM stock markets today...we saw a similar occurrence earlier this year when U.S.stocks came under pressure and that automatically improved, and that might be what we’re seeing this time around as well,” said Jason Tuvey, senior emerging markets economist at Capital Economics. |
| US tech stocks may have a better day too... | US tech stocks may have a better day too... |
| Netflix up 4% in pre-market, so the dip being bought (for now) even as Treasury yields rise again. | Netflix up 4% in pre-market, so the dip being bought (for now) even as Treasury yields rise again. |
| Wall Street is expected to rally when trading begins in four hours. | Wall Street is expected to rally when trading begins in four hours. |
| Dow futures are showing a 350 point gain, which would claw back a chunk of yesterday’s 545-point losses. | Dow futures are showing a 350 point gain, which would claw back a chunk of yesterday’s 545-point losses. |
| Fiona Cincotta of City Index thinks the worst is over, for now anyway.... | Fiona Cincotta of City Index thinks the worst is over, for now anyway.... |
| The global selloff seems to have come to an end and the market is picking up the pieces after the hurricane. The tally: the Dow has lost 1,400 points in two days, Brent Crude is back down at $81 and the dollar is trading at 1.1579 against the euro. Key indices have fallen below their 200-day moving averages and are beginning to look oversold but the underlying economic reasons for a rise in interest rates that had triggered the spike in bond yields and the selloff in equities is still in place. | The global selloff seems to have come to an end and the market is picking up the pieces after the hurricane. The tally: the Dow has lost 1,400 points in two days, Brent Crude is back down at $81 and the dollar is trading at 1.1579 against the euro. Key indices have fallen below their 200-day moving averages and are beginning to look oversold but the underlying economic reasons for a rise in interest rates that had triggered the spike in bond yields and the selloff in equities is still in place. |
| For the moment though, European markets are back in the black and the recovery in Dow futures indicates a stronger start on Wall Street later today. | For the moment though, European markets are back in the black and the recovery in Dow futures indicates a stronger start on Wall Street later today. |