Asian markets remain mixed amid trade war caution; Yen climbs

Andrew Cummings
August 14, 2019

Wall Street's main indexes fell on Monday as protests in Hong Kong added to concerns on the pace of growth in China, already under pressure from the prolonged bout of USA trade tensions that have dominated financial markets this year.

The three main indexes ended marginally lower last week, wrapping up five days of high volume trading marked by wild swings, as investors feared that a slide in China's yuan would expand the scope of the trade war to include currencies. With the US and China offering no respite to their trade war and a slew of data pointing to slowing global growth, traders will look to this week's euro-zone GDP figures and industrial production reports from both China and America for further clues to the outlook.

Trade-related worries have pulled the benchmark S&P 500 about 4% away from its all-time high hit in late-July.

Volume on US exchanges was 6.09 billion shares, compared with the 7.24 billion average over the last 20 trading days.

About 15 minutes into trading, the Dow Jones Industrial Average lost 0.8 per cent to 26,083.00, and the broad-based S&P 500 dropped a similar amount to 2,895.18.

Technology, health care and consumer discretionary sector stocks accounted for much of the market's decline. The firm now expects fourth-quarter USA growth to slow to 1.8%, compared with 2% previously.

The S&P 500 Index fell 1.2% as of 4 p.m.

Sysco rose 3.1% after the food distributor beat Wall Street's fiscal fourth quarter profit forecasts.

Trade tensions spiked earlier this month after President Donald Trump vowed to impose a 10% tariff on $300 billion of USA imports from China.

Trump has promised 10% tariffs on some $300 billion in Chinese imports that haven't already been hit with tariffs of 25%. Risk assets came under pressure after authorities closed Hong Kong's airport and a Chinese official said the city was at a "critical juncture".

China-sensitive stocks including Caterpillar, Deere and Boeing all declined more than 1%. Trump said Friday that it would be fine if U.S. Viacom shares fell 3.6%.

Investor confidence in Argentina was also shaken after business-friendly Mauricio Macri President was defeated by populist Alberto Fernández in primary elections on Monday, suggesting a similar outcome in October's presidential vote.

Bond yields fell as investors fled equities for the relative safety of haven assets amid growing concerns of global economic slowdown.

Macy's reports quarterly results on Wednesday and Walmart will report results on Thursday.

The U.S. consumer price index, out Tuesday, probably picked up to a 1.7% annual pace in July, according to economist estimates.

Second-quarter reporting season is approaching the finish line, with 452 of the companies in the S&P 500 having reported.

West Texas Intermediate crude sank 0.8 per cent to US$54.47 a barrel.

The contract gained 43 cents on Monday to close at $54.93.

The Bloomberg Dollar Spot Index advanced 0.1%.The euro was unchanged at $1.1214.The British pound was little changed at $1.2078.The Japanese yen was unchanged at 105.30 per dollar. Natural gas fell 1 cent to $2.12 per 1,000 cubic feet.

The S&P 500 Index spiked higher after trade officials named a broad swath of consumer goods that would be spared from tariffs at the current September 1 deadline.

Other reports by iNewsToday