Published: Mon, July 23, 2018
Finance | By Loren Pratt

Stocks end slightly lower as traders shrug off trade talk

Stocks end slightly lower as traders shrug off trade talk

Most Asian markets were higher yesterday despite signs that China and the U.S. were preparing to impose more tariffs on each other's products.

The biggest fallers today have been the automakers with Volkswagen and BMW sharply lower, but the losses have also pulled in BASF, Siemens as well as Deutsche Bank, while on the FTSE100 the worst fallers have been in basic resources and industrials with CRH, Melrose and BHP Billiton all near the bottom of the index. Bond yields are rising and the dollar is falling.

The dollar index.DXY fell 0.77 percent, with the euro EUR= up 0.74 percent to $1.1727.

The US dollar index fell after the remarks were broadcast and a stronger yen saw Tokyo's Nikkei 225 on Friday fall 66.8 points, or 0.3 percent, to 22,697.88.

In Taipei, the TAIEX on Friday closed up 96.73 points, or 0.89 percent, at 10,932.11 on turnover of NT$164.46 billion (US$5.35 billion).

Investors flocked to bellwether stocks in the electronics and financial sectors, leaving the stocks of small or medium-sized companies vulnerable to selling pressure, they added.

MORE TARIFF TALK: In a taped interview with the business channel CNBC, Trump said "I'm willing to go to 500", referring roughly to the $505.5 billion in goods the US imported past year from China. Earlier this month, the United States imposed tariffs on $34 billion of Chinese imports.

THE ongoing US-China trade tension may disturb the typical summer lull, while disappointing Chinese activity data (Monday) should remind investors that the current trade dispute is occurring when the Chinese economy is already slowing. The gains in metals capped a turbulent week across the industry as traders extended a month long selloff kicked off by fears that the trade tensions between China and the USA will hurt demand for industrial materials.

The U.S. government put tariffs on imported steel, aluminum, washing machines and solar panels this year and is considering taxing auto imports. Companies that sell cars and auto parts continued to slip Friday morning.

West Texas Intermediate crude rose for a fifth day, climbing 1 percent to $70.46 a barrel. Like numerous Trump-related bluster and volatility, expect markets to experience a degree of exposure therapy to future Fed and currency comments, stripping them of much of their impact.

General Electric lost 3.4 percent to $13.26. But concerns about U.S. The stock sank 21 percent to $26.29.

Long-term bond prices dropped.

2-year yield: U.S. 2.59% Australia 2.07%.

But the yuan declined further Friday as the People's Bank of China (PBOC), which sets the yuan's daily trading band, weakened the rate by the widest amount in two years. If the yuan continues to depreciate, goods exported to China will become more expensive to consumers there and Chinese exports would also be relatively cheaper.

Brent crude futures rose 0.9 percent to $73.24 a barrel, maintaining their gains so far this week, after Saudi Arabia's OPEC governor said the kingdom's exports are likely to fall next month and inventories may be squeezed in the third quarter.

European markets were not immune to the jitters. Germany's DAX fell 1.4 percent and France's CAC 40 dropped 0.9 percent.

Gold rose 0.6 percent to $1,231.10 an ounce.

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