US and China have agreed to continue trade talks. The country leaders met in the G20 meeting in Osaka, Japan today.
The stocks turned up from the early downs in Wall Street on Friday. Dow Jones ended up 0,44% to 25942 points, S&P 500 index up 0,38 % to 2881 points and Nasdaq slightly up 0,08 % to 7916 points.
The ride hailing company Uber (Uber) fell first over 9 % in its debut trading, but recovered somewhat and closed down 7,6 % to 41,53 dollars. The IPO price was 45 dollars. The market cap closed to 71,6 billion dollars, while in the IPO the market value was 82 billion dollars.
The rival ride hailing company Lyft also closed down.
The news from the trade talks with US and China showed some positive signs while the talks were “constructive” according to President Donald Trump.
Bloomberg reported that the US has given China one month time to seal the trade deal or face tariffs on all its exports to US.
The British finance minister Philip Hammond told media on Friday that US and China should avoid entering the trade war because of the vast impact on global growth and on British economy as well. According to Reuters, Mr Hammond estimates the UK will reach the 1,2 % economic growth this year.
The US mobile tech company Apple ( APPL) manufacturers most of its iPhones in China. According to Nikkei Asia, the China tops now Apple’s production site compared for example to the US.
Apple has increased its suppliers in the Greater China during the last few years and much of the materials, manufacturing and assembly processes are now in China.
In January the company said that it will start to assemble the premium phones also in India. The reason for this was also the rising concerns of trade wars between the US and China.
But also to establish the production overall in Asia to be more competitive against Samsung and Huawei.
Apple said in its 2018 annual report that the US and China are the only countries to account over 10 % of the company net sales. The sales in China were 51,9 billion dollars last year and operating income was 19,7 billion dollars.
During the second quarter, which ended March 30th, the company net sales in America were 25,6 billion dollars and 10,2 billion dollars in China. In Europe the sales were 13 billion dollars.
According to Bloomberg News, the new trade tariffs between the US and China, may eventually increase the Apple’s retail prices.
Apple’s share price was trading down 2,23 % to 195,49 dollars in Wall Street today.
Cars and auto parts may be the next trade dispute between the US and EU. According to Reuters, this issue may rise already next week.
The EU started the official trade talks with the US last month and the new tariffs for cars and auto parts would affect 47 billion euros worth of goods.
The Stock Markets were down in today´s trading in Europe and in New York. In Asia the stocks ended up in Japan and in Hong Kong.
The market were pushed down by the news of the new possible tariffs in the US EU trade talks. Also the news that IMF, the International Monetary Fund, has lowerd the global and EU economic growth forecast for this year fueled the stocks down. The global economic forecast is now 3,1 % for this year (3,3 %).
According to the US Goverment they are proposing new tariffs worth 11 billion dollars in to the production from the EU. This would include for example civilian aircraft and agricultural products. The reason for this new stage in the negotiations is the WTO , which has shown that the EU subsidies to Airbus (AIR) have had negative impact on the US trade.
Dow Jones was down 0,72 % to 26151 points, S&P 500 -index was down 0,61 %to 2878 points and Nasdaq-index was down 0,56 % to 7909 points.
In Europe the FTSE 100 ended down 0,35 % to 26151 points, the German DAX-index ended down 0,94 % to 11850 points and the Frensh CAC 40 -index ended down 0,65 % to 5436 points.
In Asia the Nikkei-index ended up 0,19 % to 21 802 points and the Hang Seng -index in Hong Kong ended up 0,27 % to 30 157 points.
The UK sterling was trading down 0,06 % to 1,205 dollars and the euro was unchanged at 1,1263 dollars. Dollar was down 0,29% to 111,16 yens today.
The UK Prime Minister Theresa May will meet the European Commission president Jean-Claude Juncker on Wednesday in Brussels to have the final discussions regarding the Irish border-issue, backstop.
UK Cabinet´s plan is to get the revised Brexit-deal to the Parliament next week before the possible second vote on the 27th Feb. According to sources one option is to use technology in order to solve the border-issue as a longer-term issue.
In London the stocks declined 0,56 % to 7197 points by the FTSE 100 -index. In Germany the Dax-index gained 0,09 % to 11309 points and in France the CAC 40 -index declined slightly 0,16 % to 5160 points.
In Wall Street Tuesday was the week´s first trading day after the President´s Day on Monday and Dow Jones increased 0,03 % to 25 891 points. The S&P 500 -index gained 0,15 % to 2779 points and Nasdaq 0,19 % to 7488 points.
The financial markets were waiting for more news related to US-China trade talks and regarding the March deadline for new tariffs. During this week is also more information expected from the Federal Reserve´s and European Central Bank´s meeting memos. On the other hand, the worsening of the economic growth outlook in China and some EU countries might impact that the central banks are forced to revised their monetary policies during the first half of this year.
Euro was trading at 1,138 dollars, down by 0,03 % and UK Sterling was down also by 0,02 % and was 1,306 dollars. Brent Crude was up 0,03 % to 66,52 dollars per barrel.
After UK Brexit votes this week, the situation with the UK- EU is still the same. No new news – this means that solution is not ready yet. The UK Parliament agreed that the deal could be done if the Irish border issue, the backstop, would have a new approach. What that would be, is still unclear and the EU has said on Wednesday that there would be no new agreements.
The UK Parliament voted that no new timeline was given, which means that the March 29th exit-day is still valid. Prime Minister Theresa May was granted a mandate to negotiate with the EU collaques about the Irish border issue. According to news agencies, she is not travelling to Brussels this week any more.
The UK Parliament is having the Brexit-vote on Valentine´s Day, the February 14th and according to Bloomberg, some EU diplomats are expecting to have the EU summit about the Brexit on the March 21-22.
The financial markets have seen increasing prices in spite of the turbulence in this Brexit-matter. For example in London the FTSE 100 -index ended up 1,58 % to 6941 points, but also the Wall Street increased to new level due to the news that the Federal Reserve will be “patient” with the future interest-rates moves. The Feds Funds Rate is now at 2,25 – 2,50 percent and the Fed is still having the 2 percent inflation target.
Dow Jones was up 1,61 % to 24976 points, the S&P 500-index was up 1,51 % to 2679 points and technology-index Nasdaq was up 2,01 % to 7169 points.
The US-China tradetalks are having a new chapter when the Chinese economic advisor, Vice Premier Liu He is meeting with the US Treasury Secretary Steven Mnuchin today and tomorrow.
In Asia, the stockmarkets were mixed while the HangSeng increased by 0,40 % to 27642 points and the Nikkei-index in Tokio decreased by 0,52 % to 20 556 points.