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U.S. stocks fell after President Donald Trump wrote in a series of Twitter posts that he would be ordering U.S. companies to “immediately start looking for an alternative” to their business operations in China.
Trade tensions have compounded with country-specific weaknesses to further mire the global growth outlook, said the International Monetary Fund’s chief economist.
Billionaire David Koch died on Friday at the age of 79, leaving behind a complicated legacy.
All eyes will be on Federal Reserve Chairman Jerome Powell Friday morning when he speaks at the Fed’s annual Jackson Hole Economic Policy Symposium.
(Bloomberg) -- U.S. stocks slumped and Treasuries rallied after President Donald Trump said he’ll respond to new Chinese tariffs and blasted Federal Reserve Chairman Jerome Powell. The dollar fell.Equities started the day lower after China threatened to impose additional tariffs on $75 billion of American goods. The S&P 500 Index briefly rebounded as Powell’s remarks bolstered speculation the central bank will cut rates next month. Gains fizzled out after Trump’s tweet, with energy and technology companies leading the stock rout. The gauge posted its fourth straight week of losses -- the longest streak since May. The Dow Jones Industrial Average tumbled as much as 745 points as only Boeing Co. advanced among its 30 blue-chip companies. The Nasdaq-100 Index plunged more than 3%.The bond market’s U.S. recession indicator -- the spread between 2- and 10-year rates -- flirted with inversion again. Elsewhere in the yield curve, three-month and 10-year Treasuries hit the most-inverted level since March 2007. The greenback dropped as Trump said that “we have a very strong dollar and a very weak Fed,” fueling chatter about a possible move to weaken the currency. Oil sank and gold surged.Read: ‘Much Tougher to Walk Back’: Investors on Trump-Tweet Stock RoutThe trade war escalation rekindled concerns about the outlook for global growth that’s already looking shaky. The announcement comes as leaders from the Group of Seven nations prepare to meet in France and central bankers gather in Jackson Hole. Trump tweeted that the Fed chairman could be a greater “enemy” of the U.S. than Chinese President Xi Jinping. “As usual, the Fed did NOTHING!,” he wrote.“Trade trumps Jackson Hole,” said John Augustine, chief investment officer at Huntington Private Bank. “Fed Chair Powell was fairly dovish today and markets were reacting to that positively, but when the trade tweet came out, that obviously changed market dynamics.”The plunge in the S&P 500 Friday destroyed what was shaping up to be a rally for the week. There have been just four other weeks during this bull market when a Friday rout erased a gain of more than 1% through Thursday, data compiled by SentimenTrader show. This had never occurred from 1950 to mid-1980s, and since then, it’s happened just 15 other times before this week.Read: Fed Rate-Cut Odds Jump as Powell and Then Trump Roil Markets“It’s all about trade, it’s all about global growth,” Scott Wren, senior global equity strategist for Wells Fargo Investment Institute, told Bloomberg TV. “Right now, people aren’t all that worried about the Fed. They’re a lot more worried about global growth and these trade negotiations.”StocksThe S&P 500 sank 2.6% to 2,847.11 at 4 p.m. New York time.The Stoxx Europe 600 Index declined 0.8%.The MSCI Asia Pacific Index gained 0.5%.CurrenciesThe Bloomberg Dollar Spot Index fell 0.35%.The euro rose 0.5% to $1.1135.The Japanese yen jumped 1% to 105.39 per dollar.BondsThe yield on 10-year Treasuries slid nine basis points to 1.52%.Germany’s 10-year yield fell three basis points to -0.68%.Britain’s 10-year yield dropped four basis points to 0.481%.CommoditiesThe Bloomberg Commodity Index slipped 0.5%.West Texas Intermediate crude fell 2.1% to $54.17 a barrel.Gold surged 1.9% to $1,537.60 an ounce.\--With assistance from Caroline Hyde, Joanna Ossinger, Adam Haigh, Todd White, Yakob Peterseil, Namitha Jagadeesh, Susanne Barton, Sarah Ponczek, Dave Liedtka, Elena Popina, Alexandra Harris and Liz Capo McCormick.To contact the reporters on this story: Rita Nazareth in New York at email@example.com;Vildana Hajric in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Christopher Anstey at email@example.com, Rita Nazareth, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
U.S. stocks ended the trading day sharply lower after President Trump escalated trade war rhetoric Friday, tweeting that he had "hereby ordered" U.S. companies "to immediately start looking for an alternative to China." The Dow Jones Industrial Average fell 614 points, or 2.6% to 25,633, the S&P 500 index lost about 75 points, or2.6% to 2,848 and the Nasdaq Composite lost 240 points, or 3% to close around 7,751. Trump's tweets were in apparent response to China announcing new tariffs of 5% and 10% on $75 billion in U.S. imports in retaliation for the Trump Administration plans to institute a new round of tariffs on $300 billion in Chinese imports, starting Sept. 1. Meanwhile, Federal Reserve Chairman Jay Powell gave a speech at the Fed's annual symposium in Jackson Hole, Wyo. in which he said "the U.S. economy has continued to perform well overall," but appeared to leave the door open for a possible quarter-point rate cut at its next meeting in September.
A friendship between President Donald Trump and one of his most vocal advocates has taken an almost-Shakespearean twist.
U.S. stocks fall sharply Friday as President Donald Trump says he’s “ordering” U.S. companies to start looking for “an alternative to China” after Beijing imposed more retaliatory tariffs on U.S. goods.
President Donald Trump on Friday slammed Federal Reserve Chairman Jerome Powell after a closely watched speech, asking if the central bank chief or China’s president was a bigger enemy of the United States.
Wall Street plunged in a broad sell-off on Friday as China and the United States traded their latest salvos in a prolonged trade war, spooking investors and erasing slight gains following a generally positive speech by U.S. Federal Reserve chair Jerome Powell. Trump pressed American companies to leave China in response to an earlier announcement from Beijing that it would impose a new round of retaliatory tariffs on an additional $75 billion in U.S. goods, upping the ante in an acrimonious trade war that has roiled markets for months and shown little sign of abating.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. President Donald Trump signaled he may escalate the trade war with China in the coming hours after the country’s latest round of tariffs, firing off a new demand that U.S. companies seek alternatives to producing goods in China.“I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States,” Trump tweeted Friday, after China threatened to impose additional tariffs on $75 billion in American goods, including soybeans, cars and oil.A meeting on trade took place around midday in the Oval Office, according to people familiar with the discussions. Trump is scheduled to leave late Friday for the G-7 summit in France, where trade tensions and their impact on the global economy are at the top of the agenda.Trump added in a flurry of tweets that he “hereby ordered” American companies to start looking for alternatives to making products in China. It wasn’t immediately clear what legal authority the president would have to force such corporate decisions.The president laced into China, saying “We don’t need China” and that the U.S. would be “better off without them.” He also took aim at the Federal Reserve over what he’s called its failure to lower interest rates to boost the economy and keep the dollar from becoming too strong, which weighs on exports.U.S. stocks fell to their lows of the day after Trump’s remarks, with the S&P 500 Index down 2.1% at 2:10 p.m. in New York. Technology stocks were hardest-hit. Treasuries rallied.The angry set of tweets from Trump came after China announced its retaliation for new U.S. tariffs due to take effect Sept. 1 and Federal Reserve Chairman Jerome Powell repeated his concern that U.S. trade policy was contributing to a slowdown in both U.S. and global economies. They also reflected Trump’s growing frustration with the lack of progress in his trade battles with China, according to analysts close to the White House.“The president has been increasingly frustrated in the last three months’’ with China after the May breakdown of talks that he believed were about to yield a deal, said Michael Pillsbury, a China expert with the Hudson Institute in Washington with whom Trump has consulted in the past.QuickTake: How the U.S.-China Trade War Got to This PointTrump’s most likely response, Pillsbury said, would be to raise tariffs from 10% to 25% on remaining imports from China that are due to start taking effect Sept 1. But he had other ways to increase pressure, Pillsbury added, including giving the final green light to sales of F-16s to Taiwan that have been signed off on by the State Department. The administration has notified Congress it intends to go ahead with the sale.Derek Scissors, a China expert at the American Enterprise Institute who has also advised the administration, agreed that an increase in tariffs was the most likely course of action, though it could be staged to give China more time to respond.Trump’s order to U.S. companies to abandon China would mean very little in the short-term, Scissors said. But the president does have other ways he could increase pressure on U.S. companies to stop doing business with China, particularly if he chose to invoke a national security emergency and ban tech companies from selling certain products to Chinese buyers.“It’s worth the market being a little nervous that U.S. tech companies are involved with China and that they are providing China with dual-use technologies,’’ Scissors said. “That’s what the hawks are angry about. So the president can take action against those companies not by ‘I hereby order,’ but by starting a process where the direct pressure on them goes up.’’China’s newest tariffs came earlier Friday in retaliation for Trump’s latest planned levies on Chinese imports, which have pushed U.S. stocks and commodities lower. The move takes aim at the heart of Trump’s political support -- factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing.Trump reiterated his criticism of the Fed after Powell’s remarks were released earlier Friday morning: “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?” Trump said in one of his tweets, referring to Chinese President Xi Jinping.The news from Beijing rekindled concerns about the world’s two largest economies and a global growth outlook that’s already looking shaky.Some of the Chinese countermeasures will take effect starting Sept. 1, while the rest will come into effect from Dec. 15, according to the announcement from China’s Finance Ministry. This mirrors the timetable the U.S. has laid out for 10% tariffs on almost $300 billion of Chinese shipments.Read More: Trade War to Last Longer Than Fed Cut Boost: Analyst RoundupChina will put an extra 5% tariff on American soybeans and crude-oil imports starting next month. The resumption of a suspended extra 25% duty on U.S. cars will resume Dec. 15, with an additional 10% on top for some vehicles. With existing general duties on autos taken into account, the total tariff charged on U.S.-made cars would be as high as 50%.The U.S. Chamber of Commerce called China’s move “unfortunate but not unexpected.”“The fact of the matter is that nobody wins a trade war, and the continued tit-for-tat escalation between the U.S. and China is putting significant strain on the U.S. economy, raising costs, undermining investment, and roiling markets,” Myron Brilliant, the chamber’s head of international affairs, said in a statement.After Trump gave the go-ahead earlier this month for tariffs on the almost $300 billion in Chinese imports that haven’t been hit by higher duties, China halted purchases of agricultural goods and allowed the yuan to weaken.Possible ActionsOther than possibly raising the tariffs set to kick in Sept. 1, it isn’t clear what action Trump might take. Inside the White House, hawks have been pushing for a direct intervention in currency markets by the Treasury by pointing to a slowdown in U.S. manufacturing, which many economists have blamed on tariffs imposed by Trump and uncertainty surrounding his trade war with China.Just how effective a Fed cut or an intervention would be is unclear. The relevant Treasury fund has $92 billion in it. Even if the Fed were to join in, as it has in past interventions, and match that amount, a $180 billion injection into a $5 trillion per day global foreign-exchange market might have a limited effect. It might also unnerve markets and have longer-term economic consequences.Beyond that, the administration could raise further barriers to Chinese investment in the U.S. or target China’s energy supply by revoking waivers that allow Beijing to continue purchasing oil from Iran and Venezuela. Trump could also take steps to further isolate Huawei Technologies Co., which the U.S. deems a security threat, in its bid to supply 5G technology in the U.S. Or, Trump could take a harder line against Beijing over human rights and the autonomy of Hong Kong, where protests have raged for weeks.Fentanyl OrderU.S. and Chinese negotiators have spoken by phone and are planning another call in coming days. People familiar with their intentions previously said that the Chinese delegation is sticking to their plan to travel to the U.S. in September for face-to-face meetings, which may offer a chance for further reprieve.Trump also ordered mail carriers to search for deliveries of the drug fentanyl coming from China.“Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE” deliveries of the illegal drug. It isn’t clear what the carriers’ responsibilities are in halting those shipments, which have helped fuel an opioid epidemic in the U.S.Stopping shipments of illegal fentanyl that enter the U.S. is a job that typically falls to government agencies such as the Drug Enforcement Administration, Food and Drug Administration and Customs and Border Protection.Illegal Chinese fentanyl is increasingly entering the U.S. through the Mexico border via drug traffickers instead of being sent directly. It’s unclear if Trump also wants to stop legal fentanyl, often used by cancer patients to treat pain, from entering the U.S. as well, which would cause an outcry from patients.(Updates with analysts comments starting in eighth paragraph.)\--With assistance from Saleha Mohsin and Justin Sink.To contact the reporters on this story: Joshua Gallu in Washington at firstname.lastname@example.org;Shawn Donnan in Washington at email@example.comTo contact the editors responsible for this story: Alex Wayne at firstname.lastname@example.org, Joshua Gallu, Larry LiebertFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The facts don’t support the popular view that buybacks promote inequality, squelch corporate investment, and artificially boost earnings per share.
Foot Locker Inc. stock plummeted 17% in Friday trading after the athletic retailer reported second-quarter earnings and sales that missed expectations. Net income totaled $60 million, or 55 cents per share, down from $88 million, or 75 cents per share, last year. Adjusted EPS of 66 cents missed the 67-cent FactSet consensus. Sales were $1.77 billion, down from $1.78 billion in 2018 and below the $1.82 billion FactSet guidance. Same-store sales increased 0.8%; the FactSet outlook was for 3.2% growth. Foot Locker stock is down 21.2% for the year to date while the S&P 500 index has gained 16.6% for the period.
WASHINGTON/BEIJING (Reuters) - President Donald Trump on Friday pressured U.S. companies to leave China after Beijing unveiled retaliatory tariffs on $75 billion in U.S. goods, stoking fears their escalating trade war will tip the global economy into recession. Trump, who has accused China of unfair trade practices and pushed for a deal that would rebalance the relationship in favour of U.S. manufacturers and workers, said on Twitter he will issue a response to Beijing's latest tariff plan on Friday afternoon.
U.S. stocks and Treasury yields sank after President Donald Trump said that American companies are “hereby ordered to immediately start looking for an alternative to China.”
U.S. stock indexes slumped nearly 2% on Friday after President Donald Trump told U.S. companies they should look for ways to close their China operations, following Beijing's announcement that it would impose retaliatory tariffs on U.S. goods. Trump's assertion that the U.S. would be "far better off" without China wiped out what would have been Wall Street's first weekly gain since July, while also knocking back the impact of a speech by Federal Reserve Chief Jerome Powell supporting further cuts in interest rates.
American cars, soybeans and oil largely produced in key swing states have been targeted for additional import tariffs by China, marking the latest volley in a widening trade war with the United States that has damaged the global economy.