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07 September 2018
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| financial markets (The Total Investment & Insurance Solutions) |
Global stock markets mostly fell on Friday as traders mulled over the
effects of possible U.S. tariffs on $200 billion in Chinese goods and looked
ahead to U.S. jobs data.
KEEPING SCORE: In Europe, France's CAC 40
fell 0.3 percent to 5,230, while the FTSE 100 index of leading British shares
gave up 1 percent to 7,249. Germany's DAX fell 0.3 percent to 11,927, after the
country's trade surplus dipped to four-year low. U.S. indexes are set for a
subdued open. Dow futures dropped 0.2 percent and the broader S&P 500's
futures shed 0.1 percent.
ASIA'S DAY: Japan's benchmark Nikkei 225 fell
0.8 percent to 22,307.06 and the Kospi in South Korea dropped 0.3 percent to
2,281.58. Hong Kong's Hang Seng index, which has dropped 18 percent since its
peak in late January, was almost flat at 26,973.47. The Shanghai Composite
index was 0.4 percent higher at 2,702.30. Australia's S&P/ASX 200 shed 0.3
percent to 6,143.80. Shares were lower in Taiwan and most of Southeast Asia.
US-CHINA TENSIONS: The Trump administration
may impose tariffs of up to 25 percent on an additional $200 billion in Chinese
goods, after a public comment period ended Thursday. The imports are equal to
nearly 40 percent of all the goods China sold the U.S. last year. Doing so
would escalate a confrontation between the world's two biggest economies and
likely squeeze U.S. companies that import everything from handbags to bicycle
tires. China has said that it is ready to retaliate with "necessary
countermeasures" if President Donald Trump goes ahead with the tariff
hike. Commerce Ministry spokesman Gao Feng said Thursday that the country is
confident it can maintain "steady and healthy" economic growth. It
has announced a $60 billion list of American products targeted for retaliation.
The Chinese government has said it would help local and even foreign businesses
in the country mitigate the effects of the trade dispute.
ANALYST'S TAKE: "The market is risk-off
and pricing in the effects of new tariffs. It's a done deal as far as investors
are concerned," said Francis Tan, investment strategist at UOB Private
Bank. "I don't think that China will retaliate with a full-fletched
devaluation of the yuan. They will turn to other non-tariff measures," he
added.
DATA OUTLOOK: Investors are expecting a
string of U.S. releases on Friday, such as the latest unemployment rate.
Economists have forecast that employers added 189,000 jobs in August and that
the unemployment rate dipped from an already-low 3.9 percent to 3.8 percent. In
the coming week, the markets will also be looking out for Chinese data,
including the country's year-on-year foreign direct investment and industrial
output. Next week's Bank of England and European Central Bank meetings could
also affect sentiment.
ENERGY: Benchmark U.S. crude added 12 cents
to $67.89 a barrel. The contract dropped 1.4 percent to settle at $67.77 a
barrel in New York. Brent crude, used to price international oils, gained 19
cents to $76.69 a barrel. It lost 1 percent to $76.50 a barrel in London on
Thursday.
CURRENCIES: The dollar edged up to 110.85 yen
from 110.83 yen. The euro strengthened to $1.1611 from $1.1625.The Total Investment & Insurance
Solutions
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