'Tariff Man' Trump’s China Tweets, Recession Fears, Push Dow Down 800 Points

Lloyd Doyle
December 6, 2018

The technology sector fell 2.80%, while industrials dropped 3.47% over a lack of specifics on the Sino-US trade truce, including no written commitments and when the truce period starts.

Defensive Utilities .SPLRCU eked out a 0.2 percent gain, the only one of the 11 major S&P 500 sectors in positive territory. While the Chinese Foreign Ministry acknowledged that further talks on tariffs would proceed, Beijing has yet to corroborate details on any major parts of the trade agreement, with Chinese state media avoiding any reference to a 90-day condition, nor did it mention an agreement to unilaterally reduce auto tariffs. -China trade truce reached over the weekend wasn't all it was cracked up to be.

The sharp turn in the markets followed a strong rally on Monday fueled by optimism over the news that President Donald Trump and his Chinese counterpart Xi Jinping had agreed at the G-20 summit over the weekend to a temporary, 90-day stand-down in the two nations' escalating trade dispute.

The trade dispute has rattled markets in recent months as signs emerged that it has begun affecting corporate profits.

"There are plenty of reasons to believe that growth in either the economy or the markets is going to soften next year", Frederick said.

"Maybe we're not going to get as dovish a Fed as some think", said Joseph LaVorgna, chief economist, Americas at Natixis in NY. "It will always be the best way to max out our economic power". That seemed to counter Fed Chairman Jay Powell's remarks last week.

The jitters helped drive demand for government bonds today, pushing prices higher.

A note from S&P Global Ratings predicted that United States growth would slow from 2.9 per cent in 2018 to 2.3 per cent in 2019 and 1.8 per cent in 2020, adding that the United States was nearing the "latter" stages of a multi-year growth cycle.

Financial stocks also weighed the market down as the bond market signaled fears of a weakening economy.

MARKETS OVERSEAS: In Europe, Germany's DAX fell 0.6 percent, while France's CAC 40 dropped 0.4 percent. Toll's shares slumped 9.5 percent to $30.33.

Apple lost 3.7 per cent to $177.99 after the consumer electronics giant was downgraded by HSBC analysts, citing the possibility that iPhone volume and value growth may moderate due to a saturated mobile phone market.

Oil prices rose. OPEC members are expected to agree at a Thursday meeting to cut output in 2019. Brent crude, the worldwide standard, added 1 percent to $62.28 per barrel in London.

CURRENCY: The dollar gained to 113.17 yen from Wednesday's 112.78 yen. The euro declined to $1.1330 from $1.1343. Hong Kong's Hang Seng added 0.3 percent. The British pound fell to $1.2716 from $1.2728. The S&P ASX/200 in Australia gave up 1 percent. The Nasdaq fell 197 points, or 2.7 percent, to 7,244.

The Dow Jones Industrial Average fell 211 points, or 0.8 percent, to 25,611.

Other reports by Iphone Fresh

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