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Slowing China Trade Looms Over Trading

Published 2017-08-08, 09:03 a/m
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Stock markets in Europe, plus U.S. index futures are flat this morning, while currencies are steady. Commodities have been active, along with resource stocks.

Overnight, both China and Germany reported growing and higher than expected trade surpluses, which could attract political attention. The market, however, has focused on the fact that for China, both imports and exports grew significantly less than expected, raising questions that perhaps China isn’t doing as well as traders had been thinking. This news sent Australian stocks down 0.5% and copper down 0.3%.

This action suggests that Canadian resou‎rce stocks could come under pressure today, although a 0.5% bounce from WTI crude oil could cushion the blow. Crude oil may remain active around the OPEC Non-OPEC meeting on compliance with production targets and tonight's Weekly API inventories.

U.S. indices continue to have a mixed performance, with the Dow holding 22,000, while the S&P 500 and Nasdaq (NASDAQ:NDAQ) still refuse to confirm the breakout. There are a ton of earnings due from smaller companies, which could influence breadth and broad market sentiment. In Canada, Valeant Pharmaceuticals (NYSE:VRX) could be active after beating the street on earnings but trimming sales guidance.

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