Before the bell this morning, analysts see international stocks shake under the weight of US /trade pressure.
We’ve been seeing downward action in the markets for a couple of weeks as an unprecedented American belligerence on Sino-US trade rocks investors.
This morning Josephine Mason and Shinichi Saoshiro report further slumps under the headline, “Investors Run For Safety Amid Threat of Broader US-China Spat”
“Global stocks were slightly lower on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc in muted trade amid renewed worries over the U.S.-China spat,” they write on last night’s market activity.
Noting that the US has to some extent smoothed things over with Chinese telecom operator Huawei, the two contend that the White House may have another Chinese technology company in the crosshairs.
“Relief over Washington’s temporary relaxation of curbs against China’s Huawei Technologies evaporated after reports that the White House is considering further sanctions on Chinese video surveillance firm Hikvision,” write Mason and Saoshiro. “Fears of another blacklisting reinforced worries that U.S. President Donald Trump is looking beyond sealing a trade deal with China to a potentially bigger battle aimed at curbing Beijing’s technology ambitions.”
Simon Webber, a portfolio manager quoted in the story, also addresses the broader context of this and what we could see as the ramifications of this trade conflict continue to kick in.
“If we get retaliation, if we start deconstructing supply chains, if we get countries asking whether they can rely on products and services overseas, then we’ll have much more uncertainty and a much more worrying environment,” Webber reportedly said.
Mason and Saoshiro further report on technical indicators that the negativity is affecting world markets:
“MSCI world equity index, which tracks shares in 47 countries, was down slightly at 0905 GMT, as investors shunned assets considered risky in times of economic and political strife. The reports rattled European and Asian stocks, with the euro-zone STOXXE down 0.1%.”
Watch the US stock index behavior this morning as we enter the day’s trading session, and keep in mind that the US/China trade issue is still very much on the front burner.
UPDATE 9:35AM: Sure enough, SP500/DJIA dip. At least the Fed isn’t raising interest rates!