Wall Street edged lower on Monday as uncertainties following recent US-China trade negotiations clouded sentiment and investors turned their focus on the third-quarter earnings season, which begins in earnest on Tuesday. All three major US stock averages closed in the red, snapping a three-day winning streak during which the benchmark S&P 500 gained 2.7 per cent.
Hopes dimmed that recent trade negotiations between the United States and China would bear fruit, as China indicated further talks were needed and US Treasury Secretary Steven Mnuchin said the next round of tariffs on Chinese imports are on track to go into effect on 15 December if a deal has not been reached by then. And while US President Donald Trump hailed his phase 1 of the US-China trade deal as ‘by far, the biggest deal ever made,’ no deal was committed to paper and most tariffs on Chinese imports remain in effect. That said, an uneventful day in the markets was to be expected, given the Columbus Day holiday.
Third-quarter reporting season hits the ground running on Tuesday, with major US banks expected to report a 1.2 per cent decline in earnings, their first year-on-year drop in three years, due in part to low interest rates and trade tensions.Morning-Market-Note-Thuesday-15th-October