ZCZC
BCN-16
WORLD-MARKETS
Global stocks tumble on worries over trade, slowing growth
NEW YORK, May 30, 2019 (BSS/AFP) – World stock markets tumbled Wednesday
on mounting worries over US-China trade tensions amid talk that China could
limit exports of rare earths in another escalation of the months-long fight.
Troubling movements on bond markets also heightened fears of a global
slowdown, while a public appearance by US Special Counsel Robert Mueller
sparked further speculation on whether US President Donald Trump could face
impeachment in Congress.
Asian equities mostly slid as investors grew anxious about a possible
economic slowdown in the absence of progress in resolving the US-China trade
spat.
That was followed by declines of more than one percent in London, Paris
and Frankfurt. Wall Street also finished solidly lower for a second straight
session.
“Due to the unquantifiable potential outcome of the increasingly heated
trade dispute with China, investors recently concluded it better to retreat
rather than rotate,” CFRA Research chief investment strategist Sam Stovall
said in a research note.
The conflict between Beijing and Washington threatened to deteriorate
further as Chinese state media dangled the threat of cutting exports of rare
earths to the United States as a counter-strike in the trade war, potentially
depriving Washington of a key resource used to make smartphones, military
hardware and other crucial goods.
The state-owned Global Times warned in an editorial that the “US will rue
forcing China’s hand on rare earths.”
“It is believed that if the US increasingly suppresses the development of
China, sooner or later, China will use rare earths as a weapon,” the
nationalist tabloid said.
– China’s ‘secret weapon’? –
Spreadex analyst Connor Campbell rated the threat as the catalyst for
Wednesday’s selloff, calling rare earths China’s “not-so-secret weapon in the
trade war.”
In a sign of intensifying concern over economic growth, the yield, or rate
of return for investors, on the 10-year US Treasury notes hit 2.208 percent,
the lowest level since September 2017.
MORE/HR/1105
ZCZC
BCN-17
WORLD-MARKETS 2 LAST NEW YORK
Adding to the mix of market headwinds, Mueller made his first public
appearance since releasing a report on Russian interference in the 2016
presidential election, saying that a decision not to charge Trump of
obstruction of justice was due to Justice Department policy against indicting
a sitting president; Mueller pointedly refused to clear the US president of
wrongdoing.
Art Hogan, chief market strategist at National Securities, said Mueller’s
statement was sure to keep alive talk of impeachment, even though US
congressional leaders have so far not embraced that option.
“The market now wrestles with two things at the forefront of uncertainty,”
Hogan said, citing the worsening US-China trade conflict and a possible
impeachment, an event he said would be “nearly impossible” to model for
stocks.
– Key figures around 2045 GMT –
New York – Dow: DOWN 0.9 percent at 25,126.41 (close)
New York – S&P 500: DOWN 0.7 percent at 2,783.02 (close)
New York – Nasdaq: DOWN 0.8 percent at 7,547.31 (close)
London – FTSE 100: DOWN 1.2 percent at 7,185.30 points (close)
Frankfurt – DAX 30: DOWN 1.6 percent at 11,837.81 (close)
Paris – CAC 40: DOWN 1.7 percent at 5,222.12 (close)
EURO STOXX 50: DOWN 1.5 percent at 3,297.81 (close)
Tokyo – Nikkei 225: DOWN 1.2 percent at 21,003.37 (close)
Hong Kong – Hang Seng: DOWN 0.6 percent at 27,235.71 (close)
Shanghai – Composite: UP 0.2 percent at 2,914.70 (close)
Pound/dollar: DOWN at $1.2628 from $1.2653 at 2100 GMT
Euro/pound: DOWN at 88.16 pence from 88.20 pence
Euro/dollar: DOWN at $1.1134 from $1.1160
Dollar/yen: UP at 109.62 yen from 109.38 yen
Oil – Brent Crude: DOWN 66 cents at $69.45 per barrel
Oil – West Texas Intermediate: DOWN 33 cents at $58.81 per barrel
BSS/AFP/HR/1110