Markets barely moved on Monday with weak PMI and ISM manufacturing data with Construction spending edging higher in low volume session with many traders extending their holiday.  It is possible the low volume could extend today and throughout this week due to travel issues and extended vacations. With a light day of economic data, the FOMC minutes will likely be the highlight and there are no earnings today.  Strikes, possible UPS strikes, and renewed Chinese tensions add a bit of uncertainty in this short week of trading.

As we slept Asian markets saw red across the board with Hong Kong leading the selling down 1.57% on disappointing services activity numbers.  European markets are also feeling bearish this morning as economic sentiment deteriorates.  With no earnings and a light day on the economic calendar U.S. futures point to a bearish open waiting on the FOMC minutes. 

Economic Calendar

Earnings Calendar

There are no confirmed earnings reports for today.

News & Technicals’

A strike by Canadian longshore workers is disrupting the flow of trade and causing congestion at two major ports. The workers, who are members of the International Longshore & Warehouse Union and Canada’s Longshore Division, are in a dispute with the British Columbia Maritime Employers Association over wages and working conditions. The association says the negotiations are on hold while they consult with federal mediators. According to CNBC, the strike has left about $19 billion worth of goods stranded off the coast of Vancouver and Prince Rupert, and this figure is likely to rise. VesselsValue, a maritime data provider, warns that the strike will also affect the efficiency and speed of vessel operations, as more ships are waiting to enter or leave the ports. Vancouver is one of Canada’s main container ports, handling about half of the country’s containerized cargo.

A potential strike looms at United Parcel Service, the world’s largest package delivery company, as the Teamsters union accuses the firm of abandoning the talks over a new contract. The union, which represents about 340,000 UPS workers, said on Wednesday that the company had presented an offer that was unanimously rejected by the union’s national negotiating committee. The union also said that UPS had told them it had nothing more to offer and that no further negotiations were planned. The union said it was disappointed and frustrated by UPS’s stance and that it was ready to take action if necessary.

China has canceled a planned visit by the EU’s top diplomat, Josep Borrell, amid rising tensions over trade and human rights. Borrell was supposed to meet with Chinese Foreign Minister Qin Gang next week, but Beijing scrapped the trip without giving a clear explanation. The move comes as U.S. Treasury Secretary Janet Yellen is preparing to visit Beijing on Thursday, in a bid to ease the strained relations between the world’s two largest economies. China also announced new export controls on two metals that are vital for the production of semiconductors and electronics, potentially affecting the global supply chains of these industries.

Equities barely moved on Monday as stock and bond markets closed early before the Tuesday holiday. The session was quiet as traders likely extended their holiday and we should not be surprised if the low volume is present today do the all the airline troubles travelers have experienced this week. Sector performance was mostly similar, except for the consumer discretionary sector which rose thanks to a surge in Tesla shares after the electric carmaker reported better-than-expected delivery and production numbers. Interest rates edged higher, following their recent upward trend in reaction to a series of strong economic data and what they mean for the Fed’s future policy.

Trade Wisely,

Doug