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05 December 2018
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| financial markets (The Total Investment & Insurance Solutions) |
Global stock prices tumbled Wednesday after Wall Street plunged amid
confusion about what Washington and Beijing agreed to in a tariff cease-fire.
KEEPING SCORE: In early trading, London's FTSE 100 index fell 1.3 percent
to 6,932.04 and German's DAX lost 1.1 percent to 11.207.49. France's CAC 40
retreated 1.2 percent to 4,951.74. On Tuesday, the DAX lost 1.1 percent, the
CAC 40 shed 0.8 percent and the FTSE 100 slid 0.6 percent. On Wall Street, the
future for the Standard & Poor's 500 index was up 0.45 percent and that for
the Dow Jones Industrial Average gained 0.25 percent.
ASIA'S DAY: Hong Kong's Hang Seng index fell 1.6 percent to 26,819.58
and the Shanghai Composite Index declined 0.6 percent to 2,649.81. Tokyo's
Nikkei 225 lost 0.5 percent to 21,919.33 and Sydney's S&P-ASX 200 shed 0.8
percent to 5,668.40. Seoul's Kospi gave up 0.8 percent to 2,101.31 and India's
Sensex was 0.6 percent lower at 35,902.74. Benchmarks in Taiwan, New Zealand
and Southeast Asia also retreated.
WALL STREET: Investor confidence in the U.S.-China agreement faltered
after confusing and conflicting comments from President Donald Trump and some
senior officials. That revived fears the disagreement between the world's two
biggest economies could slow global growth. The Standard & Poor's 500 slid
3.2 percent to 2,700.06. The Dow Jones Industrial Average lost 3.1 percent to
25,027.07. The Nasdaq composite lost 3.8 percent to 7,158.43. Tech companies,
banks and exporters including Boeing and Caterpillar all declined.
TRADE TURMOIL: The Trump administration raised doubts about the
substance of a U.S.-China trade cease-fire. That revived fears their tariff
battle could chill global economic growth. Trump previously said the agreement
in Buenos Aires would lead to sales of American farm goods and cuts in Chinese
auto tariffs, but Beijing has yet to confirm that. Trump renewed threats of
tariff hikes on Tuesday, saying on Twitter that Washington would have a
"real deal" with China or else would charge "major tariffs"
on Chinese goods. That made the weekend agreement seem even less likely to
produce a long-lasting settlement.
FED WATCH: Markets got jolt from remarks by the president of the Fed's
New York regional bank. During a briefing with reporters, John Williams said
given his outlook for strong economic growth, he expects "further gradual
increases in interest rates will best sponsor a sustained economic
expansion." That seemed to counter Fed Chairman Jay Powell's remarks last
week. The jitters helped drive demand for government bonds. The yield on the
10-year Treasury note fell to 2.91 percent from 2.99 percent late Monday, a
large move. The slide in bond yields, which affect interest rates on mortgages
and other consumer loans, weighed on bank stocks.
ANALYST'S TAKE: "Positive sentiment from the China-U.S. trade war
truce dissipated quickly," Eugene Leow and Radhika Rao of DBS Group said
in a report. "Questions on trade, worries about US growth and perceived
dovishness on the Fed all play a part in explaining these market moves.
Concerns were also compounded by increasing news narrative on inverted curves
and risks of a recession."
ENERGY: Benchmark U.S. crude fell 54 cents to $52.71 per barrel in
electronic trading on the New York Mercantile Exchange. The contract rose 30
cents on Tuesday to close at $53.25. Brent crude, used to price international
oils, lost 66 cents to $61.42 per barrel in London. It gained 39 cents the
previous session to $62.08.
CURRENCY: The dollar gained to 112.96 yen from Wednesday's 112.78 yen.
The euro fell to $1.1339 from $1.1343.The
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