Stocks Open Lower as Uncertainty Over Trade Talks Persists
08 Mayo 2019 - 9:03AM
Noticias Dow Jones
By Avantika Chilkoti
U.S. stocks slipped Wednesday as investors closely monitored
rising U.S.-China tensions.
The Dow Jones Industrial Average dropped 16 points and the
S&P 500 lost 0.1%. Futures on both were down about 0.4% before
U.S. markets opened.
In Asia, the Shanghai Stock Exchange dropped 1.1%, Hong Kong's
Hang Seng Index was also down 1.2% and Korea's Kospi dropped 0.4%.
The moves echoed sharp losses in U.S. markets Tuesday.
Meanwhile, in Europe, the Stoxx Europe 600 dropped 0.3% in
morning trading, with benchmark indexes across the U.K., France and
Germany all drifting lower.
Companies in the finance and utilities sectors dragged the
European benchmark lower Wednesday, while technology and
communications groups did better.
Siemens, Europe's largest engineering company and a bellwether
for the regional economy, was among the biggest winners, gaining
4.5% following an announcement that it would spin off its power and
gas business. And shares in Wirecard, the German financial services
group, were up 2.4% after the company posted its latest
earnings.
Despite rising tensions, China said top trade envoys will head
to Washington Thursday to resume negotiations. U.S. officials had
accused Beijing of reneging on its side of the bargain and
threatened to raise tariffs on $200 billion of Chinese imports to
25% from Friday.
It is unsurprising that the U.S. has increased pressure on China
in recent weeks, said Ed Smith, head of asset allocation research
at Rathbone Brothers Plc., the investment manager, given
expectations that talks will formally wrap up around the meeting of
G-20 leaders in Osaka in June -- and President Donald Trump's usual
negotiating tactics.
"He loves a bit of brinkmanship and he particularly likes some
particularly vocal and belligerent brinkmanship," said Mr. Smith,
who is currently recommending investments he sees as stable like
the FTSE100 and S&P 500 indexes, as well as sectors like
beverages, aerospace and defense.
After falling steeply at the beginning of the year, the Cboe
Volatility Index or VIX, a yardstick for expected swings in
equities, has picked up this week.
The 10-year U.S. Treasury dipped to 2.430% from 2.448% on
Tuesday. Yields move inversely to prices. German 10-year government
bonds were still in negative territory at -0.038% as investors mull
the possibility that President Trump could soon ramp up trade
barriers for Europe too.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, was up slightly.
Investors will be watching closely when the Commerce Department
publishes the latest trade data on Thursday. Economists surveyed by
The Wall Street Journal forecast a widening in the deficit in
March. And the Labor Department will publish inflation figures
Friday, with economists expecting price growth to tick up on a
year-on-year basis.
Elsewhere in commodities, global benchmark Brent crude oil was
down 0.5% on Wednesday morning at $69.50 following reports that
Iran is to stop complying with parts of the 2015 nuclear deal, as
relations with the U.S. grow tense.
Analysts at Commerzbank, point out that fresh U.S. tariffs on
China could weigh on oil demand, given that the countries together
make up around one-third of global oil demand. But supply has also
tightened and U.S. sanctions are set to further quell oil shipments
from Iran and Venezuela, in particular.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
May 08, 2019 09:48 ET (13:48 GMT)
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