U.S. Stocks Open Mixed on U.S.-China Trade Concerns
December 10 2018 - 10:04AM
Dow Jones News
By Georgi Kantchev
U.S. stocks started the week under pressure and global stocks
fell as trade tensions between Washington and Beijing continued to
weigh on investor sentiment.
Stocks opened lower after futures recovered from earlier losses
and pointed to a flat opening for the S&P 500 and the Dow Jones
Industrial Average. In early minutes of New York trading, the Dow
fell 0.26% and the S&P 500 slipped 0.17%, then traded flat to
slightly higher.
In Europe, the Stoxx Europe 600 fell 0.6%. The British pound
fell to its lowest in 18 months on reports of a delay in a key
parliamentary vote on Brexit.
Asian markets fell across the board, with Japan's Nikkei
shedding 2.1%.
Over the weekend, U.S. officials maintained a hard line in trade
negotiations with China despite a truce struck between President
Trump and Chinese President Xi Jinping in Buenos Aires at the start
of the month. U.S. Trade Representative Robert Lighthizer said
Sunday the U.S. would hold fast to its 90-day deadline for the
conclusion of a lasting agreement, adding that Washington would
impose punishing tariffs on Chinese imports if none is reached.
For its part, China on Sunday summoned the U.S. ambassador to
China, Terry Branstad, to demand the U.S. retract its arrest
warrant for a senior executive at Huawei Technologies Co. who was
taken into custody in Canada.
Trade uncertainty, coupled with worries about slowing global
growth and geopolitical tensions, have curbed risk appetite among
investors in recent months.
"It's clear that there will be ongoing trade tensions, and that
matters for investors," said Ann-Katrin Petersen, investment
strategist at Allianz Global investors. "This is a superpower
rivalry that will continue for longer."
World trade growth is already slowing and leading indicators are
also trending downward, economists at Citigroup wrote in a report
to clients Monday. Growth in global merchandise trade volumes in
September was at its lowest level since early 2018, the bank
said.
U.S. jobs data on Friday showed that nonfarm payrolls increased
a seasonally adjusted 155,000 in November to cap the slowest
three-month growth rate in a year, a sign the economy could be
losing some momentum after a strong year.
"There's more downside for global growth. We expect a period of
lower returns and higher volatility going forward," Ms. Petersen
said.
The WSJ Dollar Index, which tracks the dollar against a basket
of 16 currencies, was up 0.1%. The 10-year U.S. Treasury yield rose
to 2.859%, compared with 2.851% Friday. Yields move inversely to
prices.
The British pound dropped after reports that U.K. Prime Minister
Theresa May will call off a parliamentary vote on Britain's exit
from the European Union. The U.K. parliament was widely expected to
reject Ms. May's deal, throwing plans for Brexit on March 29 into
turmoil.
The U.K. currency fell 0.9% against the U.S. dollar to
$1.2624.
Also Monday, the European Court of Justice, the EU's highest
court, ruled that the U.K. government can unilaterally reverse its
decision to leave the bloc without the approval of its EU
counterparts. The ruling is a boost anti-Brexit campaigners but
further complicates Ms. May's struggle to win parliamentary backing
for her deal.
Later in the week, investors will be focusing on the meeting of
the European Central Bank, which is widely expected to leave
interest rates unchanged and announce the end of its massive
quantitative easing program.
Official Chinese data indicated a slowdown in the world's
second-largest economy as its export growth slowed sharply in
November. Total exports grew 5.4% from a year earlier, decelerating
from a 15.6% increase in October, missing economist forecasts for
10% growth. Import growth also missed forecasts.
In Asia, Hong Kong's Hang Seng was down 1.2% while South Korea's
Kospi fell 1.1%.
In commodities, Brent crude, the global oil price benchmark,
fell 1.3%. Gold was down 0.2%.
Write to Georgi Kantchev at georgi.kantchev@wsj.com
(END) Dow Jones Newswires
December 10, 2018 09:49 ET (14:49 GMT)
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