Monday 16 September 2019

Trade war to-and-fro sees markets swing

 

Tapestry Inc. which owns the up-market Coach and Kate Spade, tumbled on poor sales, adding to retailer woes after Macy’s missed estimates (stock photo)
Tapestry Inc. which owns the up-market Coach and Kate Spade, tumbled on poor sales, adding to retailer woes after Macy’s missed estimates (stock photo)

David Chance

US stocks swung wildly between gains and losses on Thursday as strong retail sales and upbeat Walmart earnings eased fears of a recession while contradictory messages from President Donald Trump on his trade dispute with China drove markets first one way and then the other.

Bond markets, however, were having none of the optimism and US Treasuries saw the 30-year yield dip below 2pc for the first time, signalling expectations the world's largest economy would weaken while stimulus hopes in Europe weakened the euro.

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The S&P 500 attempted to bounce back from one of its worst days of the year, boosted by strong earnings from Walmart and solid data on the American consumer.

Tapestry Inc. which owns the up-market Coach and Kate Spade, tumbled on poor sales, adding to retailer woes after Macy's missed estimates.

General Electric sank more than 10pc on accusations of financial fraud, while Cisco Systems fell the most in two years, blaming a slowing global economy for a weak outlook.

The trade war hung over markets, with discordant headlines sending risk assets on a wild ride throughout the American morning.

Stocks sold off after China said it would retaliate against fresh tariffs bounced back after official comments struck a more conciliatory tone.

President Trump added to concern, saying any deal with China must be "on our terms."

"We're getting a lot of mixed signals on the trade war. There are messages from both the US and China, sometimes they're tougher messages and sometimes they're less tough messages. It's hard to sort out," said Janet Johnston of TrimTabs Asset Management.

Earlier, European assets took a jolt when a top official at the European Central Bank said stimulus measures would exceed investor expectations next month.

Irish Independent

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