Asian stocks moved higher on Wednesday morning following positive Chinese trade data that showed signs of a strengthening global economy. China’s imports expanded 44.7 percent in February from the prior year, a growth that piggybacked off of January’s growth and caused an unusual trade deficit in China. The country’s exports rose 4.2 percent. A near 80 percent expectation for a U.S. Federal Reserve interest rate hike next week also inspired Asian stock gains. The MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.25 percent on Wednesday, and data from Thomson Reuters shows that though Asian stocks are cheaper than their U.S. counterparts, Asian pricing is nearing the upper edge of a historical trading band on a price-to-earnings basis.
U.S. stocks, fresh off all-time highs, suffered another day of losses on Tuesday, with S&P 500 and the Dow pulling in their first two-day losing streak in over a month. The S&P 500 was dragged down by pharmaceutical stocks and financial shares after U.S. President Donald Trump tweeted that he was working to reduce drug prices in the industry. In typical fashion, he didn’t elaborate on his plan, but his tweet was enough to rattle the markets.
Oil Market Movements
In a spontaneous press briefing on Tuesday OPEC and non-OPEC oil producers recommitted to their production cuts and expressed hopes that there would be continued compliance with the plan. Saudi Arabia Oil Minister Khalid Al-Falih noted that Saudi Arabia would not be willing to shoulder the burden of the cuts and that he expects all 24 countries that signed the agreement to comply. He confirmed that Saudi Arabia is now fully compliant with its commitment and is producing under 10 million barrels per day.
Despite this announcement global benchmark Brent slid 0.5 percent on Wednesday to $55.64 per barrel.