How US-China trade war impacts global stocks market?

6 May 2019, Swissquote – President Trump threatened to drastically ramp up U.S. tariffs on Chinese imports, a surprise twist that put an accord in doubt as Beijing considered pulling out of talks scheduled to begin this week.

US-China trade deal appears in jeopardy as Trump tweets tariff threat on Chinese goods

In a pair of Twitter messages Sunday, Mr. Trump wrote he planned to raise levies on $200 billion in Chinese imports to 25% starting Friday, from 10% currently. He also wrote he would impose 25% tariffs "shortly" on $325 billion in Chinese goods that haven't yet been taxed.

"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate," the president tweeted. "No!"Mr.

Trump's tweets surprised many Chinese officials, according to a person briefed on the matter Monday, and China is considering canceling trade talks that are to resume in Washington starting Wednesday. There has been widespread expectations in recent days that an accord could be reached by Friday. "China shouldn't negotiate with a gun pointed to its head," the person said.

A decision on whether to go ahead with the talks this week hasn't been made, the person said. Chinese officials have said Beijing wouldn't bend to pressure tactics. By potentially scorching the trip, Beijing would be following up on its pledge to avoid negotiating under threat. The timing of Mr. Trump's threat triggered speculation that it was aimed at pressuring China and scoring points domestically. How has the global stock markets been impacted?
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Swiss stocks market ended trading with a slight change

With little change, the Swiss stock market had ended trading at the end of the week. With the better-than-expected US Labour Market Report for April, the SMI had risen to a new all-time high of 9,787 points, but was unable to defend its gains. The downward movement was boosted by the unexpected slowdown in growth in the US services sector in April. There were also weak economic data from Switzerland. Consumer confidence fell in April.

Moreover, inflation remains very low. In April, consumer prices rose by 0.7 percent year-on-year, slightly above expectations. In the core rate, the increase was only 0.5 percent. The Swiss National Bank is thus likely to maintain the current interest rate level. The SMI lost 4 points to 9,742 points. In terms of individual stocks, the focus was on the Swiss Reshare. After the publication of the results for the first quarter, the shares lost 3.1 percent and were thus at the bottom of the SMI. Investors were mainly looking for defensive pharmaceutical stocks.

European stocks rose higher

European markets climbed as first-quarter earnings from banks HSBC and Societe Generale came in strongly. The Stoxx Europe 600 index was up 1.53 points, or 0.39% but finished the week down 0.64 points, or 0.16%, to 390.37. The index saw the largest one-week point-and-percentage decline since the week ending April 12. London stocks closed higher after data showed the U.S. labor market added more jobs than expected in April.

The FTSE 100 rose 0.4% to 7380.64, but ended the week 0.6% lower. Germany's DAX on the day was up 67.33 points, or 0.55%, and finished the week up 97.57 points, or 0.79%. And the French CAC on the day was up 9.98 points, or 0.18%, and was down 20.52 points, or 0.37%, this week to 5548.84. Adidas surprised with very strong figures, which caused the share price to jump by 9.1 percent. Above all, the strong margins were praised by market participants. The consensus expectation for pre-tax profit was beaten by 7 percent, analysts said.

US Stock Market Overview

U.S. stocks rallied, flipping the S&P 500 positive for the week and leaving it a hair below its record after data showed the U.S. labor market added more jobs than expected in April. After vaulting to start to 2019, major indexes have slowed their ascent, though they have continued to grind higher.

They notched their best four-month start to a year since at least 1999 through the end of April, lifted by improving U.S. economic data and better-than-expected corporate earnings that have eased investors' concerns of an economic slowdown. Central banks across the world have moved to delay monetary-policy tightening, fueling the rally.

The S&P 500 rose 1% to 2945.64, just 0.01% below its April 30 record. The Dow Jones Industrial Average climbed 197.16 points, or 0.7%, to 26504.95, snapping two straight days of losses. And the Nasdaq Composite added 127.22 points, or 1.6%, to 8164.00, tallying its fourth record close of 2019 and its sixth consecutive week of gains.

China stocks drop, leading Asia markets lower

In Asia, a range of assets from equities to commodities plunged. Mainland Chinese equities, which reopened after last weeks' holidays, were particularly hard hit, with the Shanghai Composite on course for its biggest single-day decline in eight weeks.

US government bond prices rose

U.S. government bond prices rose after jobs data showing a slower-than-expected rise in wages exacerbated concerns about slow inflation. The yield on the benchmark 10-year Treasury note fell, snapping two consecutive days of increases, settling at 2.531% from 2.552% Thursday. The yield rose 0.025 percentage point for the week, climbing for the fourth week out of the past five.


This article was provided by Swissquote. While every effort has been made to ensure that the data quoted and used for the research behind this document is reliable, there is no guarantee that it is correct, and Swissquote Bank and its subsidiaries can accept no liability whatsoever in respect of any errors or omissions, or regarding the accuracy, completeness or reliability of the information contained herein.

This document does not constitute a recommendation to sell and/or buy any financial products and is not to be considered as a solicitation and/or an offer to enter into any transaction. This document is a piece of economic research and is not intended to constitute investment advice, nor to solicit dealing in securities or in any other kind of investments.

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