DAILY MARKET UPDATE

November 20, 2019

Global stock markets traded lower throughout the day amid a market wide risk-off rotation brought about by increasing U.S./China trade uncertainty; the major worldwide exchanges shed between 0.5% and 0.8% today. There were a few developments out overnight in the U.S./China trade narrative that weighed on investors’ appetite for risk. The first negative development occurred on Tuesday night after the U.S. Senate passed a bill in support of pro-democracy protestors in Hong Kong. This sparked a response from Beijing in which they warned of unspecified consequences should the bill be signed into law. The House is expected to vote on a finalized bill on Thursday (according to reports out mid-day today), after which it will be sent to the President who must then decide to sign the bill into law or to veto it. As for phase-one U.S./China trade negotiations, Reuters reported that the Trump administration believes that rolling back existing tariffs, in addition to canceling the scheduled December 15th tariff increases, requires deeper concessions from China. Wilbur Ross told Fox Business in an interview that the Trump administration continues to believe they can achieve a phase-one deal with China, although Hu Xijin, the editor in chief of China’s state-run Global Times newspaper and de-facto mouthpiece of the CCP to the West made some inflammatory tweets overnight, including one that said that “Few Chinese believe that China and the US can reach a deal “, and that China is “prepared for the worst-case scenario, a prolonged trade war.” The market came sharply for sale this afternoon on the back of a Reuters report that said the two sides may not be able to complete a phase-one deal this year. Rates continued to retrace lower, as well, resulting in further flattening along the US Treasury curve.

– After Market Movers: 

-NUAN Reports Q4 $0.33 v $0.28e, Rev $472.0M** v $484Me; +6.0% afterhours 

-LB Reports Q3 $0.02 v $0.02e, Rev $2.68B v $2.69Be; +2.5% afterhours 

-LZB Reports Q2 $0.52 v $0.55e, Rev $447.2M v $454Me; -4.4% afterhours 

-OPTN Announces proposed public offering of common stock of indeterminate amount; -12% afterhours.