Global Stocks Waver as Trade War Weighs on Chinese Exports
December 09 2019 - 08:53AM
Dow Jones News
By Paul J. Davies
Global stocks began the week with tepid declines as fresh
economic data showed a sharp decline in Chinese exports to the
U.S., highlighting the impact of the trade war between the world's
two largest economies.
Futures tied to the S&P 500 index edged down about 0.1%
following a rise Friday after a surprisingly upbeat monthly jobs
report signaled strength in the U.S. economy. The Stoxx Europe 600
ticked down 0.2% Monday, while the Shanghai Composite Index ended
the day up less than 0.1%.
China's exports unexpectedly dropped 1.1% in November from a
year earlier, while shipments to the U.S. fell 23%, data from the
General Administration of Customs showed Sunday. Uncertainty about
the trade talks between the two nations has weighed on global trade
and the economic outlook for much of this year, and made markets
jittery.
With a new round of tariffs poised to go into effect Sunday on
imports from China, a commerce ministry official said Monday that
China hopes trade negotiations with the U.S. will result in a
"satisfactory" outcome as soon as possible. Some analysts expect
Mr. Trump to delay imposing new tariffs while negotiators are
pursuing a deal. His economic adviser, Larry Kudlow, said Friday
that there were "no arbitrary deadlines" to complete a limited
trade deal.
"Avoiding a total breakdown remains the most important outcome
for investors," said Geoffrey Yu, head of the U.K. investment
office at UBS Wealth Management. "Expectations are somewhat
contained, so even if there is something before the 15th, it may
not herald a new bull market or unleash an upswing in investment
and/or GDP growth globally."
Among European stocks, Tullow Oil was the biggest loser on
Monday. The stock dropped more than 60% after the energy company
cut production forecasts and its chief executive resigned with
immediate effect.
Elsewhere in Asia, the Nikkei 225 index rose 0.3% after data
showed the Japanese economy grew faster than expected in the third
quarter. Gross domestic product expanded by an annualized 1.8% in
the three months ended Sept. 30, surpassing a preliminary official
estimate of 0.2%.
Over in the U.K., the FTSE 250 index of stocks dropped 0.4% as
Britain prepares to vote in Thursday's crucial general election,
which will set the country's course for how or whether it leaves
the European Union. Polls suggest the ruling Conservative Party is
set to win, though a recent narrowing of the lead is enough to keep
the outcome uncertain. The pound rose 0.1% to $1.315, its highest
since April.
Later this week, the U.S. and European central banks are both
holding meetings to review interest rates, but neither is expected
to announce any change in policy.
Write to Paul J. Davies at paul.davies@wsj.com
(END) Dow Jones Newswires
December 09, 2019 08:38 ET (13:38 GMT)
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