Equities fall further on another Trump tweet; Uber begins trading

Summary:

• US stocks decline on Trade concerns

• Uber begins trading near IPO price

• DE30: Thyssenkrupp surges on JV rumours

• USDCAD swoons after data released

• 3 markets to watch

It’s been a tumultuous week for global stock markets with concerns surrounding US-China trade tensions returning with a vengeance and seeing some sizable declines. While It has been more than a year since Washington first slapped levies on Chinese imports, tensions had dissipated significantly in recent months before a tweet from Trump last weekend brought them back to the front and centre of investors minds and caused a large gap lower.  This lunchtime the US president took to social media once more to tweet inflammatory remarks aimed at Beijing and this caused another drop lower in US futures ahead of the open and they’ve extended their decline during cash hours with the S&P500 falling to its lowest level in 6 weeks at 2826.

One stock to watch this afternoon is Uber (UBER.US on xStation) with the firm making its debut on the NYSE. The IPO has begun near the IPO which was priced at $45 per share, towards the lower end of its range, with the company to be valued at $75.46B - a similar valuation as that of Caterpillar and makes Uber one of the most valuable companies ever to go public. In 2018, Uber's revenue reached $11.3 billion for the year, up 43% from 2017, while reporting adjusted losses of $1.8 billion, an improvement over losses of $2.6 billion in 2017, according to its IPO filing. One of Uber’s biggest competitors is rival ride-hailing app Lyft, which went public back in March but after a stellar first day’s trade the stock has fallen sharply to trade well below its IPO price.

Thyssenkrupp (TKA.DE) is the best performing DAX member on the final trading day of the week. Reuters reported that the company may abandon plan to create a joint venture with Tata Steel. The agency claims that the German company now mulls either a holding structure or separation and subsequent listing of its elevators unit.

The Canadian NFP often surprises markets and that was the case this time as it showed a rise of employment of 106.5k against the consensus of just 10k. This is the largest gain in history and even if the data is a major outlier, it’s a confidence boost for the Canadian economy that could buoy the CAD if oil prices stay high. In the US we saw the core inflation accelerating in April to 2.1% y/y from 2% in March but in monthly terms the 0.1% gain was below expectations and headline inflation was weaker than expected too. That comes on top of weaker PPI readings and with tariffs arriving as the US economy slows, this could reignite rate cut speculation sooner than the Fed would like.  USDCAD fell more than 80 pips to trade below the 1.34 handle before recovering somewhat into the European close.

Our latest 3 markets to watch focuses on the DE30, Oil and USDTRY and can be found here.