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Dow Wobbles as US Senate Hong Kong Bill Pressures Trump-Xi Relations, Crypto Coins News

Dow Wobbles as US Senate Hong Kong Bill Pressures Trump-Xi Relations, Crypto Coins News


  • US stocks are under pressure, with the US Senate poised to pass a bill supporting Hong Kong that may destroy Trump’s hopes of a phase one trade deal.
  • The Dow made no progress as a huge sell-off in Cisco undid a decent rally in Boeing stock.
  • Weakening Chinese data suggest Xi needs a trade deal, but analysts are skeptical it is imminent.

The Dow Jones wobbled on Thursday as anticipation of a Chinese crackdown in Hong Kong prompted the US Senate to press ahead with a unanimous bipartisan effort to passa law in support of the anti-government protestors.

Given the precarious nature of trade talks, this is terrible news for both Donald Trump and the Dow, as it reduces the probability of a trade deal passing anytime soon.

Dow Jones Roiled by US-China Trade Deadlock

The Dow Jones fell on Thursday as H ong Kong continued to damage hopes of a trade deal between the US and China. | Source:Yahoo Finance

Allthree of the major US indices remained virtually unchanged, as the Dow Jones Industrial Average, Nasdaq, and S&P 500 all bounced between gains and losses.

Shortly before the closing bell, the Dow had dipped

. 81 points or 0. 06% to 27, 766. 78.

The Nasdaq slid 0. 06%, but the S&P 500 ticked 0. 01% higher to round out a mixed day on Wall Street.

The cautious move from risk assets was confirmed by adecline in Treasury yields, and money flowed into bonds and gold.

Hong Kong Bill Throws Another Wrench into Trade Talks

Investors appear to be growing tired of waiting for a trade agreement, withmultiple reports emphasizing deadlockand apartial trade agreement looking more and more elusive.

Even a basic farm goods purchase increase seems impossible to secure, andthe probability of a comprehensive a greement is unquestionably dropping.

Nevertheless, the Dow Jones has been resilient to trade war uncertainty, focusing on robust earnings and trusting that Trump is going to securesomekind of deal ahead of the 2020 election.

However, with Senator Marcio Rubio leading abipartisan charge to pass a pro-protestor Hong Kong billin Congress, a firebomb has been thrown into thealready tense situation between President Trump and President Xi.

Source:Twitter

An adverse reaction from the Dow would be unsurprising, given thatmany investors expect no further escalations in the trade war, a forecast that may have been too rosy.

Chinese Economic Data Could Be Bad News for the US Stock Market

Economic data out of China have been closely scrutinized over the last few months, with plenty of evidence that Trump’s trade war is starting to bite domestically.

Amiserable industrial production figure Wednesday nightdemonstrated this more clearly than ever. It remains to be seen how resilient US stock indices like the Dow can be if a significant engine of global growth like the Chinese economy continues to slow.

China might take a hard line in public, but the data suggest they need a deal just as much as the US. | Source: Host Broadcaster via AP

Reacting to last night’s economic data, ABN AMRO senior economist Arjen van Dijkhuizen confirmed the view thatChina and the US both have compelling reasons for making a trade deal, but that doesn’t mean one is going to happen any time soon.

The latest macro data suggest that not only the US but also China has a clear incentive to at least put an end to the tariff tit-for-tat, with new US tariffs due on 15 December without a short-term deal. Uncertainties remain, however, for instance, on how many rollbacks on existing tariffs could be agreed on and under what conditions (such as an enforcement mechanism).

Dijkhuizen concluded,

Given that both parties remain wide apart on some fundamental issues, a comprehensive deal still looks out of sight for now, and strategic tensions between the two will likely linger.

Dow 30 Stocks: Boeing Saves the Day After Cisco Plunges

It could have been a miserable day in the Dow 30, as the market punished Cisco for posting a worse than anticipated earnings release. As a result of the selling, CSCO lost 7.6% and is now up just 3% on the year, lagging the Dow Jones by 15%. The stock is now in danger of becoming the fourth member of the index to slip into the red, alongside 3M, Pfizer, and Walgreens.

Cushioning the index from a heavy blow, Boeing stock rallied over 1.5%, even though theSouthwest pilots union suggested they feared that the company might be rushing the (Max jet back into service too fast.

Disney gave back some of Wednesday’s sizable gains after a banner first day for Disney , likely due to some profit- taking after the hotly-anticipated release.

Despite the relatively mild slip in the Dow, it is worth noting that two-thirds of the 30 DJIA stocks were in the red, including Apple, which posted a 0.6% loss aftera rare bearish downgrade f rom a prominent Wall Street analyst.

Click here for a live Dow Jones Industrial Average chart.

This article was edited by Josiah Wilmoth.

Last modified: November 14, 2019 20: (UTC)

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