Five Things You Need to Know to Start Your Day

Written by
Joe Easton
Written by

Joe Easton

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(Bloomberg) --

Good morning. The stock rally fueled by trade optimism is cooling a bit, the U.K. Conservative party is dusting itself off after a tough day for its election campaign and German factory orders will be eyed as a key economic indicator. Here's what's moving markets.

Waiting

Stocks in Asia mostly slipped as investors looked for fresh reasons to be bullish about trade negotiations. Investors are now waiting to see if U.S. President Donald Trump will do as China asks and eliminate some of the tariffs he's imposed, in order to hurry along a deal. One sign that investors have been betting in recent days on a positive trade outcome is that lower-volatility shares from sectors less exposed to economic cycles have started to underperform after beating the market for much of the year. Strategists at HSBC Holdings Plc say it's time to sell risk assets as sentiment looks stretched.

Johnson to Regroup

U.K. Prime Minister Boris Johnson will attempt to get his election campaign back on track later after a day of blows that including seeing one of his most senior ministers, Jacob Rees-Mogg, forced to apologize for his comments about the 2017 London tower block fire. Johnson has a meeting with the queen later, in which he'll tell the monarch he didn't want an early election, but had no choice because it was the only way to break the deadlock on Brexit. Former Chancellor Philip Hammond quit Parliament yesterday with a swipe at the prime minister for not allowing a wide range of views in his party. Meanwhile, British businesses aren't taking Johnson's ”Get Brexit Done” slogan too seriously.

Factory Fears

German factory orders are becoming one of the euro area's biggest monthly data points, with the last two readings helping to fuel fears of a recession in the currency bloc's largest economy. Manufacturing in the zone on a whole is the weakest it's been for seven years, adding to pressure on the region's governments to provide more fiscal stimulus, and anything other than a return to small growth for the factory number at 8 a.m. CET, as forecast by the average economist, could hit the euro today.

Swipe Left

Not even the business of dating apps is immune to macroeconomic factors such as Brexit and currency movements, according to Match Group Inc. The company's shares sank 15% in after-hours New York trading as the Tinder and Hinge owner's fourth-quarter sales forecast missed estimates and its profits were crimped by legal disputes. Post-market sentiment in U.S. tech stocks was hurt further by misses for midcap tech firms HubSpot, Inc. from the cloud sector and chipmaker Microchip Technology Inc. But on a more bullish note, watch HP Inc. shares later after the Wall Street Journal reported that Xerox Holdings Corp. is considering a cash-stock offer for the $27 billion PC giant.

Coming Up…

Earnings from French bank Societe Generale SA fell short of forecasts this morning, while embattled German payment firm Wirecard AG and U.K. high street bellwether Marks & Spencer Group Plc are among those still to come. Meanwhile, the central bank speaker schedule gets a tad busier with U.S. and euro-zone policymakers due up at different events, while Poland, Iceland and Romania are all forecast to make no change to their rates in monthly decisions announced later. Finally, Bill Gates and Kim Kardashian West are among participants at the New York Times DealBook conference of business leaders and innovative thinkers.