News of Additional U.S. Tariffs on China Overshadow Strong Earnings Results from Apple
Global equity indexes are trading mixed early Wednesday on conflicting reports. Helping to provide support is a stronger-than-expected earnings report from Apple and a report from Bloomberg that the U.S and China were set to resume negotiations. However, potentially bullish conditions changed following another report that said President Trump is planning to propose a 25% tariff on China imports worth $200 billion.
Apple reported strong results for the fiscal third quarter after the bell on Tuesday, beating The Street estimates on earnings per share and average iPhone selling price.
The quarterly report showed:
- Earnings Per Share (EPS): $2.34 vs. $2.18, according to Thomson Reuters consensus estimates.
- Revenue: $53.3 billion vs. $52.34 billion, according to Thomson Reuters consensus estimates
- iPhone Sales: 41.3 million vs. 41.79 million, according to StreetAccount
Shares of Apple rose 4 percent in extended trading.
Trade Talks Could Resume
Early in the Asian Session on Wednesday, stocks edged higher following a report from Bloomberg that the U.S. and China may restart official talks about their months-long trade dispute.
Bloomberg News reported, citing two sources that representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are in private talks to resume negotiations on trade matters in a bid to avoid a trade war. Mnuchin had told CNBC last week that “quiet conversations” with Beijing continued to take place.
Additional Trump Administration Tariffs
The early rally stalled after a report surfaced stating that the Trump administration plans to propose slapping a 25-percent tariff on $200 billion of imported Chinese goods after initially setting them at 10 percent, in a bid to pressure Beijing into making trade concessions, a source familiar with the plan said on Tuesday.
The source also told CNBC that the Trump administration could announce the tougher proposal as early as Wednesday. The new plan more than doubles the tariff rate first reported by Bloomberg News on July 10.
New Zealand Labor Report
The New Zealand Dollar is trading lower against the U.S. Dollar following the release of its quarterly employment report.
On a quarterly basis, employment added 0.5 percent – also topping expectations for 0.4 percent but down from 0.6 percent in Q1.
The unemployment rate came in at a seasonally adjusted 4.5 percent in the second quarter of 2018, Statistics New Zealand said on Wednesday. That exceeded expectations for a 4.4 percent reading, which would have been unchanged from the previous three months.
Overall employment in New Zealand was up 3.7 percent on year – topping forecasts for 3.6 percent and up from 3.1 percent in the three months prior.