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?
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.
Besides coronavirus, other news has been driving the stocks of Apple, Wallmart and General Motors to the lower levels.
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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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