Wall Street down – trade talks and yield in focus

Wall Street fell sharply onTuesday due to the new concers over the US China trade talks and the Treasury yield curve.

According to markets, the Treasury 10-year yield curve, which indicates the coming recession, was one of the market concerns and the 10-yield hit its lowest value since September. The demand for longer-dated Treasuries rose.

Also President Donald Trump said on Tuesday that if the countries cannot solve the trade issues and differences, he is a “tariff man”.

Dow Jones fell 2,66 % and was 25 138 points. S&P 500 index fell 2,17 % to 2729 points and Nasdaq dropped 3,21 % and ended at 7202.

In Europe the decline was modest. In London the FTSE100  fell 0,56 % to 7022 points and German Dax-index 1,14 % to 11 335. In Paris the CAC40 -index ended down 0,82 % and was 5012. In Asia the stock markets were mixed and for example in Hong Kong the stocks rose 0,29 % , but in Tokyo the markets fell 2,39 %.

The UK Parliament was having Brexit discussions and the Parliament voted about the legal advice related to the topic. The outcome was that the Goverment will have to publish the full disclosure of the Brexit legal advice.

Euro and sterling ended slightly down and euro was 1,1341 dollars and sterling 1,2716 dollars.

The US stock and bond markets will be closed on Wednesday.

Business Finance

G20: US and China to halt tradewar

During the G20 meeting in Argentina the US and China leaders, President Mr Donald Trump and China President Mr Xi Jinping agreed to halt the escalating trade war.

According to the White House spokesperson,  President Trump would not follow through his threat to raise tariffs on Chinese goods from 10% to 25% in the new year.  This has been the major issue in the discussions and also one of the biggest threats to global economy.

The countries also agreed that China will buy more agricultural, energy and industrial products from the United States. The aim is to reduce the trade imbalance between the countries.

According to White House, this new statement gives both countries 90 days time to agree upon new trade terms. If such agreement is not ready, the former tariffs increase from 10% to 25 % will become into force.

The financial markets ended up in Wall Street on Friday evening. Dow Jones ended +0,79 % to 25538, S&P 500 + 0,82 % to 2760 and Nasdaq 0,79 % to 7330 points. In Europe the markets were down with the FTSE 100 -index -0,83 % to 6980 and German Dax-index -0,36 % to 11 257 and CAC 40-index in Paris -0,05% to 5003.

Euro declined 0,67 % to 1,13 US-dollars and UK sterling ended down 0,33 % to  1,27 US-dollars.

Business

Brexit: May on tour – vote day the 11th Dec

kuva-1

The British Prime Minister Theresa May has been on tour in order to engage with the Brexit-deal. Today she has been in the Northern Ireland and Wales as part of her campaign. Her message is the same as was released on Sunday in the EU leaders meeting in Brussels.

The main argument still is that this is part of the national interest and the second point is that this is the only Brexit deal, there is not going to be a better one.

The voting day has been confirmed and it is the 11th of December, that is on Tuesday. So, there is excatly 14 days before the vote in Westminister in London. The Bank of England and Goverment  are going to publish their analysis of the economic impact of the Brexit-deal. According to Reuters, this information should be ready tomorrow,  on Wednesday this week.

The financial markets were mixed today. For example the German Dax-index ended down 0,40 percent to 11309,11 points and in Paris the stocks were down 0,24 percent-  the CAC 40 -index ended at 4983,15 points. In London the FTSE 100 -index ended down 0,27 percent and was 7016,85 points.

In Wall Street the stocks were also mixed – Dow Jones -index was up 0,18 percent at 24685,55 points and  S&P 500 -index was up 0,09 percent to 2675,87 points. Nasdaq-index had declined by 0,22 percent and was 7066,08 points.

This week will be important G20 meeting in Argentina and  according to Financial Times the US- China tradetalks have not performed  as good as expected so far. The question of the US- UK tradetalks in post Brexit-time is also one of the topics.

One of the big news today was the General Motors layoffs in the US. The car company announced its plans to cut production at several sites and to lay off more than 14.000 workers. The stock of GM (GM) was down 3,55 percent to 36,32 dollars. President Donald Trump tweeted that he will consider cutting all GM subsidies because of the plans. “including the electric cars”, he tweeted according to CNBC.

The euro was down by 0,30 percent to 1,129 US-dollars and the sterling was down by 0,76 percent to 1,2730 US-dollars.

 

 

 

 

 

Business Finance

Trade tensions and currencies – Brexit deal near?

The trade tensions between the US and China have caused overall speculations about the currencies and their role in the trade talks.

For example the Chinese central Bank Governor Yi Gang said in the IMF and World Bank meeting in Bali, that China will not use the exchange rate as a tool to deal with trade tensions. According to Reuters, he mentioned also that there are plenty of room for interest rates adjustments and that the monetary stance is still basically neutral.

During last week for example ECB Governor Mario Draghi said that the key global risk is a sudden jump in the interest rates. Also the US President Donald Trump has been asking about the Federal Reserve´s monetary policy by  quoting that the dollar is strong. For example the US dollar has gained 2,3 procent against euro during a year.

Last week was also very turbulent in the stock markets and for example the UK stocks were down about 10 procent from the year highs – the Wall Street was able to make a positive turnaround and ended positive for the day.

On yearly basis, the US stock have been perfmorning well with S&P 500 -index up nearly by 8,5 % , Nasdaq up by 14,7 % and Dow Jones by 10,9 %. In Europe, the trend has been negative with the German DAX-index down by 11,2 % and the UK FTSE 100-index down by 7,4 %. The euro has traded down 1,5 % agains the UK pound at the same time.

This weekend is also very important for the next week meetings around the Brexit talks. According to Bloomberg, next week EU & UK meetings are vital in accordance for the breaktrough and keeping the timetable.

kuva-2During the Brexit talks there has been mixed feelings about the future and opportunites among the big corporations. For example Unilever (UNA:NA), consumer goods company,  decided to stay in London, while many of the financial services companies like Goldman Sachs have decided to move some of ther personnel to Frankfurt or Paris. According to Bloomberg, these companies have got a new banking license from Germany: Morgan Stanley, Nomura, Citi and Daiwa.

One of the reasons for the financial companies to departure to Frankfurt has been the ECB´s policy stand of the banking requirements after the Brexit. Companies have made conclusions that it would be easier to operate with a new licence in Frankfurt.

On the other hand, the UK prime minister Theresa May has said that UK would offer the lowest G20 taxes for corporations in order to keep them in the UK. – Our vision is based on openness, innovation, competition, high quality and intelligent regulation, she said at the end of September in New York and mentioned also that ” no deal is better than a bad deal”.

 

 

Business

Helsinki2018: Talks about trade & China

The  Helsinki2018 meeting has started with presidents Donald Trump and Vladimir Putin in the Helsinki Presidential Palace with the Finnish president Sauli Niinistö. According to the US President Donald Trump,  the discussions will range from trade to China.

– Getting along with Russia, is a good thing. And when we have 90 percent of the world´s nuclear power, we might talk about this as well, he said before the meeting.

 

helsinki2018-logo

 

Finance

Stock markets steady in spite of trade wars

Financial markets stayed steady during the Monday morning  trading in the European Stock Exchanges. For example the London FTSE 100 – was down about 0,09 percent, DAX in Frankfurt was up 0,07 percent and Paris CAC 40- index was up 0,01 percent.

The markets in Japan were closed on Monday, but Hang Seng was up 0,05 percent in HongKong and Shanghai A-index was down 0,61 percent.

The dollar was trading 1,17 against euro, up 0,07 percent.

The trade tensions between the US, China, Russia and EU are tiggering and the companies are facing growing unease with the situation. This will have its own impact in investment decisions, timings, places and financing. For example this will have big impact in tech companies and their locations in the future.

The markets will be expecting more information from the world leaders, the US president Donald Trump and Russian president Vladimir Putin in Helsinki today. The leaders are having their press conference during the late afternoon EET.

Finance