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Wall Street is braced for a low start
On Monday, Wall Street pointed to a steep dive at the open because the trade conflict between China and America took a steep turn for the worse.
After no agreement was reached in the previous week’s negotiations, American leader instructed US Trade Representative Robert Lighthizer to come up with 25% levies on literally all Chinese goods imported to America, in particular, those that weren’t actually covered by existing tariffs.
On Sunday, Trump warned China that the Asian country requires reaching a deal rather than putting much value on his probable loss of his 2020 reelection campaign.
On the contrary, Geng Shuang, China’s Foreign Ministry spokesman pledged that his country wouldn’t give up, although he didn’t provide immediate details on planned retaliatory measures.
Some experts are assured that the Chinese statesman didn’t provide any details due to the fact that the Chinese cabinet was working on a set of measures that will have precise effects, heavily hitting America, while minimizing damage to the Chinese economy.
Larry Kudlow, White House economic adviser guessed that both trading partners will suffer heavy losses in the escalating conflict. However, he hoped that the American economy would be less impacted.
As a matter of fact, the blue-chip Dow futures headed south by 1.2%, the S&P 500 futures decreased by 1.3%. As for the tech-heavy Nasdaq 100 futures inched down by about 1.7%.
Gauging the greenback’s purchasing power versus its main counterparts the USD index went down by 0.1% reaching 97.06, while the yield on the 10-year Treasury headed south 3 basis points reaching 2.43%.
Besides this, gold futures tumbled by about 0.3% ending up with $1,283.95 a troy ounce.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.