Stock Traders Raise Fears Over Global Economic Slowdown, Uncertainty Over Trade TalksTraders are following up on an a report from the Financial Times which said the U.S. had canceled a trade meeting with Chinese officials, scheduled for later this month. The Treasury Department and the U.S. trade representative’s office did not respond to requests for comment. However, White House economic advisor Larry Kudlow denied that an official meeting had been canceled.
The major Asian stock indexes are edging higher early Wednesday as invested shrugged off concerns over the lack of progress in U.S.-China trade negotiations. Traders were expressing some caution earlier in the session following a report that the White House had canceled a trade planning meeting with Beijing on January 30-31.
At 0300 GMT, Japan’s Nikkei 225 Index is trading 20631.54, up 8.63 or +0.04 percent. Hong Kong’s Hang Seng Index is at 27118.71, up 113.26 or +0.42 percent.
In South Korea, the KOSPI is at 2126.48, up 8.71 or +0.41 percent. China’s Shanghai is at 2588.17, up 8.47 or +0.33 percent.
Traders are following up on an a report from the Financial Times which said the U.S. had canceled a trade meeting with Chinese officials, scheduled for later this month. The report was later confirmed by a source familiar with the situation to CNBC’s Kayla Tausche.
The source claimed the meeting was canceled due to outstanding disagreements between the two sides over the enforcement of intellectual property rules. Should this report prove to be true, it would likely mean that the two economic powerhouses would fail to agree on a permanent solution to the trade dispute before the March 1 deadline. This would mean that the White House would likely reinforce punitive tariffs on roughly half of all Chinese exports to the U.S.
A White House spokesman told CNBC that “the teams remain in touch in preparation for high level talks with Vice Premier Liu He at the end of this month.”
The Treasury Department and the U.S. trade representative’s office did not respond to requests for comment. However, White House economic advisor Larry Kudlow denied that an official meeting had been canceled.
U.S. Stock Market
The major U.S. stock indexes retreated on Tuesday for the first session in four as weak data out of China weighed on investor sentiment, giving them an excuse to book profits. The catalysts behind the selling pressure was the news that Chinese economy grew by 6.6 percent last year, China’s slowest growth pace in 28 years, and lower global growth estimates from the International Monetary Fund. Basically, the down move suggests that investors are possibly pricing in fears of a global economic slowdown.
On Tuesday, the benchmark S&P 500 Index settled at 2632.90, down 37.81 – 1.48%. The benchmark Dow Jones Industrial Average closed at 24404.48, down 301.87 or -1.28% and the tech-based NASDAQ Composite finished at 7020.36, down 136.87 or -2.01%.
While the weak data from earlier in the week fueled the initial selling pressure, a report that the U.S. canceled a trade meeting with Chinese officials drove the indexes to their lows of the day.