Sharechat Logo

While you were sleeping: Trade war worries ease

Tuesday 27th March 2018

Text too small?

Wall Street gained, while US Treasuries fell, as concern about a global trade war eased amid signs of discussions between the US and China. 

In 1.30pm trading in New York, the Dow Jones Industrial Average advanced 1.8 percent, while the Nasdaq Composite Index gained 1.7 percent. In 1.15pm trading, the Standard & Poor’s 500 Index climbed 1.7 percent.

US Treasuries fell, pushing yields on the 10-year noted two basis points higher to 2.83 percent.

“There are some tentative signs that fears of an escalation of trade tensions are beginning to ease,” Craig Erlam, a market analyst at OANDA, wrote in a note to clients, Reuters reported. “A rebound in global equities overnight is offering the market some optimism of stabilisation after last week’s rout.”

The Trump administration is urging China to lower tariffs on cars and open its market to US financial services as part of talks to resolve a rise in trade tensions, Bloomberg reported, citing a person familiar with the matter.

US Treasury Secretary Steven Mnuchin called China’s Liu He to congratulate Liu on his appointment this month as vice premier in charge of economic policy, said the person. The two discussed the trade deficit between the two countries and committed to finding a mutually agreeable way to reduce the gap, the person said, adding they have exchanged correspondence, according to Bloomberg.

The Trump administration tends “to negotiate to a more reasonable position, or more toward the centre, as time goes on,” Maggie Gage, the head of Washington research at Credit Suisse Securities, told Bloomberg. “We’re cautiously optimistic that that will apply here too with the Chinese tariffs.”

The Dow rose, led by rallies in shares of Microsoft and those of Intel, recently up 6.5 percent and 5.5 percent respectively. The two stocks were bolstered by separate analysts lifting their price target and rating respectively. 

Shares of General Electric declined, down 2.1 percent in early afternoon trading and the only Dow stock to trade lower. 

Shares of Facebook dropped after the US Federal Trade Commission said it has an open non-public investigation into the company’s privacy practices. 

“The FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” Tom Pahl, acting director of the FTC’s Bureau of Consumer Protection, said in a statement. 

Facebook shares traded 2 percent weaker at US$156.19 as of 1.26pm in New York, down from a record high of US$193.09 last month. 

“They’ll have to explain to users what they’re going to do and that may stop the bleeding,” Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, told Reuters. “But in the short term everyone realises that it’s a self-feeding loop as more people leave so are more advertisers.”

In Europe, the Stoxx 600 Index fell 0.7 percent from the previous close. The UK’s FTSE 100 index fell 0.5 percent, France’s CAC40 Index retreated 0.6 percent, while Germany’s DAX Index declined 0.8 percent.


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Cashed-up Plexure eyes acquisitions to accelerate growth as loss shrinks
Tower turns to 1H profit, lifts FY guidance
IRD should have doubled claim against Watson's Cullen Group - Professor
Investore FY profit falls 16% on smaller valuation gain, signals flat dividend for 2020
Synlait receives cease and desist letter regarding Pokeno plant
21st May 2019 Morning Report
NZ dollar steady ahead of central bank speeches
Auditors need to come out of the shadows and explain the value they add: FMA
MARKET CLOSE: NZ shares gain as Liberal win in Australia boosts bank stocks
NZ dollar rises against Aussie, Chinese yuan

IRG See IRG research reports