The so-called “stock market bloodbath” has continued on Friday with major indices falling down to the lows of the last October. What's going on?
US equities are set to dive on US-China trade clashes
On Friday, Wall Street was set to start steeply lower after America announced duties on $50 billion worth of China’s goods, driving a pledge of instant and equivalent response from the Chinese authorities.
International financial markets have struggled since February amid signs America and China were getting closer to a trade conflict after several talks didn’t manage to tackle American complaints over China’s industrial policy, a $375 billion trade gap and also market access.
The equities of manufacturers Boeing and Caterpillar headed south more than 1.2% during premarket trading, while car makers Tesla as well as General Motors went down respectively 1.1% and 0.39%.
Market participants are also weighing the influence of tightening monetary policy by key financial institutions on the stock market.
On Wednesday, the American Federal Reserve had its key interest rate lifted for the second time in 2018. What’s more – the key American bank hinted at the likelihood of two more lifts by the end of this year.
In addition to this, on Thursday the European Central Bank told it would cease its bond-purchase initiative by the end of 2018, even if any interest rate lift was still far away.
Dow e-minis and ET headed south 0.69%. Furthermore, S&P 500 e-minis inched down 0.46%, while Nasdaq 100 e-minis slumped 0.3%.
NXP Semiconductors went up 1.8% after a report that China had already approved Qualcomm Inc's $44 billion acquisition of the chipmaker. As a matter of fact, Qualcomm rallied about 0.4%. By the way, sources close to the negotiations have informed that China’s yet to have the deal approaved.
The equities of Adobe inched down 3.3% after the company projected third-quarter profit that went down a bit below estimates. Its equities have run up over 47% in 2018.
Besides coronavirus, other news has been driving the stocks of Apple, Wallmart and General Motors to the lower levels.
Will coronavirus continue keeping the markets in fear? What releases should we wait for? Find out in the news!
The British pound has increased in value over the course of the past week in line with an ongoing improvement in investor sentiment.
Economic activity in service sector in the Euro zone and the UK is on its lowest rates since 2009.
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