Global Equities Fall, Trade Tensions Mount, China To Rethink Its U.S. Relationship

Global equities fall as trade tensions mount.
Thomas Hughes

The U.S. Futures Are Down In Early Trading

The U.S. futures are indicating a negative open for the broad market in early Thursday trading. The tech sector is in the lead with a loss near -2.0% which pushed the NASDAQ Composite down by -1.2%. The Dow Jones Industrials and S&P 500 were both down about -0.90%. The move is driven by increasing fear of a tech cold war that could stifle global growth over the long-term.

The chipmakers were among the biggest losers with Huawei supplier Micron down -2.35%. The U.S. Secretary of State Mike Pompeo said in comments this morning Huawei lies about its ties to the Chinese government.

Apple was also among today’s losers. The stock shed more than -1.5% on a downgrade from UBS. UBS says the current smart-phone market and U.S./China trade ties are going to cut into profit outlook. In earnings news, shares of Best Buy were moving higher in today’s early morning action. The company reported better than expected comps and EPS, revenue was in-line and raised its guidance. The big news is that guidance includes the expected impact of tariffs and is still very positive.

Europe Down On Trade And Politics

European indices were moving lower in early trading. The DAX, FTSE, and CAC were all down more than -1.20% at mid-day with little reason to be a buyer. The Autos led the decline with a drop of -3.0% as trade fears, tariffs, and slowing global economics eats into their outlook. Shares of Daimler were the hardest hit, falling more than -7.0%, even after it announced a cost-cutting effort.

In stock news, the tech sector is coming under increasing pressure. Toda shares of Arm Holdings fell after it announced it would not be doing business with Huawei. Vodafone and BTG Group said much the same thing, they are not planning on using Huawei equipment in their 5G plans.

In political news, the Brexit issue is still simmering. Theresa May’s “bold new plan” was met with disdain and likely not to bear fruit. There are now calls for her to resign despite the vote of confidence she received over the winter. It looks more and more likely the UK will force a hard-Brexit.

Asia Falls, U.S./China Trade Ties In Question

Asian markets were broadly lower in Thursday trading. The Chinese indices led and those led by Hong Kong. The Hong Kong Hang Seng fell nearly -1.60% and the Shanghai Composite nearly -1.40% while most others in the region posted much smaller losses. The declines come on the heels of harsh rhetoric from official Chinese sources. China says the U.S. must adjust its actions if it wants to resume trade talks. The South China Morning Post reports the central government may rethink China’s economic relationship with the United States.

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