Global stocks were mixed once again on tariff worries

Global stocks were mixed once again on tariff worries

US stocks were mixed Wednesday. The Dow Jones industrials were down 0.2 percent, the S&P slipped 0.75 point and the Nasdaq added 0.1 percent. Energy companies sank along with oil prices but technology companies and banks were higher.

US markets

US stocks were mixed Wednesday. The Dow Jones industrials were down 0.2 percent, the S&P slipped 0.75 point and the Nasdaq added 0.1 percent. Energy companies sank along with oil prices but technology companies and banks were higher. Investors were mainly focused on company earnings even after the US said it will put new tariffs on $16 billion in imports from China on August 23 and China said it will put 25 percent punitive duties on $16 billion of U.S. goods including cars, crude oil and scrap metal. Both countries put tariffs on $34 billion in imports earlier this month and they have threatened much larger tariffs to come.

Match Group jumped after its adjusted profit and revenue beat expectations. Match also reported big gains in subscribers, especially for Tinder. Snap, which runs the Snapchat video app, fell after it said daily users declined during the second quarter. It's the latest technology company to have its stock drop after announcing discouraging user totals joining Facebook, Twitter and Netflix. Twinkie maker Hostess Brands plunged after it said its results were hurt by cuts in promotional support and inventory from a major retailer and higher costs, including for transportation. Tesla declined as its board evaluated Elon Musk’s idea of taking the electric automaker private, a day after the CEO surprised the market by floating the idea on Twitter.

Papa John's was down after it said North American sales fell again and cut its forecasts for the year. Domino's, a rival pizza delivery company, climbed. Exxon Mobil and Chevron retreated with the price of oil. Cars.com and Avis Budget Group both sank after they cut their sales forecasts. Hertz also was lower. CVS was higher after it raised its annual profit forecast. CVS said prescriptions sales grew, although it took a loss after it wrote down the value of its Omnicare pharmacy services business by almost $4 billion. Walt Disney declined after the entertainment company's profit and revenue fell short of estimates. Tronc jumped in afternoon trading following reports that the publisher is considering an offer from a buyout group for the Chicago Tribune and the rest of its newspaper holdings.

These data reflect observations at 4:00 PM US ET. Gold was up US$3.30 to US$1,221.60. Copper futures were up 0.13 percent to US$2.76. WTI spot crude was down US$2.39 to US$66.78. Dated Brent spot crude was down US$2.44 to US$72.21. The US dollar was up against pound. It retreated against the yen, euro, Swiss franc and the Canadian and Australian dollars. The Dollar Index was down 0.11 percent. The yields on both the US Treasury 30 year bond and 10 year note were unchanged at 3.12 percent and 2.97 percent respectively.

European markets

Most stock indices declined Wednesday thanks to persistent trade war concerns that continue to weigh on investor sentiment. China retaliated with a 25 percent tariff on $16 billion of US goods after the US Trade Representative's office revealed a list of Chinese goods that will be subject to tariffs. The FTSE climbed 0.8 percent, the CAC declined 0.4 percent, the DAX slipped 0.1 percent and the SMI was 0.3 percent lower. The FTSE gained thanks to the pound’s weakness.

Lanxess advanced after it announced plans to sell its remaining 50 percent stake in ARLANXEO to its joint venture partner Saudi Aramco. Paddy Power Betfair dropped after the company downwardly revised its full-year outlook, despite registering strong earnings growth in the second quarter. Prudential gained after it reported results for the first half of the year. Roche, Novartis and Nestlé slipped in Zurich.

Hill & Smith slid to a six month low after a profit warning blamed on bad weather, project delays and caution among its UK customers. Glencore reversed earlier losses to end higher after its results slightly lagged expectations. It posted a 23 percent rise in first-half earnings and a 12 percent increase from its trading division, while noting higher production costs for copper and zinc and a still-volatile market.

France's economic growth is set to improve in the third quarter according to survey data from Bank of France. Gross domestic product is forecast to expand 0.4 percent in the third quarter, compared to second quarter’s 0.2 percent.

Asia Pacific Markets

Asian stock markets were mixed Wednesday with investors refraining from making significant moves. The overnight positive close on US markets set up a higher opening for the markets, but lack of support at higher levels resulted in some of these settling down in negative territory.

The Shanghai Composite declined 1.3 percent weighed down by losses in technology and retail stocks. The mood was a bearish on reports the US would start collecting 25 percent tariffs on an additional $16 billion worth of Chinese goods on August 23. The Hang Seng was 0.4 percent higher. In economic news, China's exports growth exceeded expectations in July despite the US tariffs on Chinese goods. Exports advanced by higher than expected 12.2 percent on the year in July. Meanwhile, imports jumped by more than expected 27.3 percent in the month, resulting in a sharp drop in trade surplus to $28.05 billion from June’s surplus of $41.61 billion.

Both the Nikkei and Topix slipped 0.1 percent. Nikon, Softbank and Furukawa Electric along with Yokogawa Electric and Toho Zinc advanced. Meiji Holdings tumbled. Tokai Carbon and NTT Data declined.

Both the S&P/ASX and All Ordinaries added 0.2 percent led by gains in mining and energy stocks. Lynas Corporation climbed along with Eclipx Group — it rebounded strongly after previous session's setback. Tabcorp Holdings advanced after the company announced that its merger talks with Tatts Group was still on track. Commonwealth Bank advanced on better than expected results. AMP gained despite a drop in quarterly earnings.

The Kospi added 0.1 percent and the Sensex was 0.6 percent higher. A report from International Monetary Fund said India's economy is picking up and growth prospects look bright following the implementation of recent polices. India's economy is forecast to grow about 7.3 percent for the fiscal year starting April 2018 from 6.7 percent a year ago. The IMF, which said huge government debt and budget deficit were key macroeconomic challenges, called for independence of public sector banks.

Washington said on Tuesday it would begin collecting 25 percent tariffs on another $16 billion in Chinese goods from August 23. These come after it last month slapped tariffs on $34 billion of goods. The flurry of punitive trade blows from the Trump administration in recent weeks and little sign of compromise from either side have left many investors doubtful of a sustained turnaround for shares in the near term, even with Beijing’s pledges to support the economy and pump priming in the financial system. To support growth, Beijing is taking steps to ease financing constraints on borrowers, which have been fueled in part by a multi-year campaign to reduce excessive financial risks and slow a rapid build-up in debt.

Looking forward

China releases July consumer and producer price indices. Japan posts June machine orders. Canada releases July housing starts. In the US, July producer price index along with weekly jobless claims, fed balance sheet and money supply will be released.

Global Stock Markets

    End 2018 Daily Percent Change
  Index 2017 Aug 7 Aug 8 Change Daily 2018 Yr/Yr
North America                
United States Dow 24719.22 25628.91 25583.75 -45.16 -0.2 3.5 16.0
  NASDAQ 6903.39 7883.66 7888.33 4.67 0.1 14.3 24.2
  S&P 500 2673.61 2858.45 2857.70 -0.75 0.0 6.9 15.5
Canada S&P/TSX Comp 16209.13 16286.30 16315.08 28.78 0.2 0.7 7.2
                 
Europe                
UK FTSE 100 7687.77 7718.48 7776.65 58.17 0.8 1.2 3.7
France CAC 5312.56 5521.31 5501.90 -19.41 -0.4 3.6 6.9
Germany XETRA DAX 12917.64 12648.19 12633.54 -14.65 -0.1 -2.2 3.9
Italy MIB 21853.34 21853.81 21790.30 -63.51 -0.3 -0.3 -0.3
Spain Ibex 35 10043.90 9772.80 9747.10 -25.70 -0.3 -3.0 -8.0
Sweden OMX Stockholm 30 1576.94 1619.89 1622.63 2.74 0.2 2.9 3.3
Switzerland SMI 9381.87 9201.22 9176.15 -25.07 -0.3 -2.2 1.7
                 
Asia/Pacific                
Australia All Ordinaries 6167.29 6340.84 6354.85 14.01 0.2 3.0 9.3
Japan Nikkei 225 22764.94 22662.74 22644.31 -18.43 -0.1 -0.5 14.7
  Topix 1817.56 1746.05 1744.71 -1.34 -0.1 -4.0 7.8
Hong Kong Hang Seng 29919.15 28248.88 28359.14 110.26 0.4 -5.2 2.2
S. Korea Kospi 2467.49 2300.16 2301.45 1.29 0.1 -6.7 -2.8
Singapore STI 3402.92 3340.00 3326.74 -13.26 -0.4 -2.2 #N/A
China Shanghai Comp 3307.17 2779.37 2744.07 -35.30 -1.3 -17.0 -16.2
Taiwan TAIEX 10642.86 10983.44 11075.25 91.81 0.8 4.1 5.8
India Sensex 30 34056.83 37665.80 37887.56 221.76 0.6 11.2 19.2

Data Source — Haver Analytics

Bond markets

10-Yr Govt BondsClosing YieldChange Yield (bp)
US 2.97% 0
UK 1.31% -1
Germany 0.40% -1
Japan 0.10% 0
Australia 2.67% 2

Source — Bloomberg

Currencies and commodities

CurrencyAugust 7August 8Change (%)
Japanese yen 111.4000 110.9800 0.4%
Australian dollar 0.7425 0.7434 0.1%
Yuan 6.8314 6.8355 -0.1%
Euro 1.1599 1.1614 0.1%
British pound 1.2941 1.2887 -0.4%
Swiss franc 0.9953 0.9931 0.2%
Canadian dollar 0.7660 0.7683 0.3%

Source — Bloomberg 

CommoditiesAugust 8Change
Brent Spot $72.21 -3.27%
Gold $1,221.60 $3.30
Thompson-Reuters/ Jeffreys Commodity index 198.24 -0.74%

Source — Bloomberg 

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