Print Edition - 2019-05-19 | MONEY
Trade war fears hit Wall Street
-, New York
May 19, 2019-
Wall Street finished a topsy-turvy session in the red Friday amid worries over US-China trade talks, while the pound fell to multi-month lows on renewed prospects of a no-deal Brexit.US investors reacted negatively to media reports that described talks between the US and China as stalled following the White House’s move this week to block Chinese telecommunications company Huawei from the US.
That drew more confrontational rhetoric from Chinese government officials.
“It feels as though further discussions on trade have been put on hold,” said Art Hogan, chief market strategist at National Securities.
“Today it seems the door is shut” to further talks, he added.
Angst over China ultimately outweighed two other conciliatory steps by President Donald Trump on Friday on trade: the lifting of steel tariffs on Canada and Mexico, and a six-month delay on imposing tariffs on auto imports which has worried Europe and Japan.
Stocks in New York briefly rallied after data showed US consumer confidence at a 15-year high. But then shares weakened, especially in the last hour of trading, with the S&P 500 finishing with a loss of 0.6 percent for the day.
European stocks also closed lower, although London’s losses were minimal due to the latest pullback in the pound.
The British currency fell to multi-month lows against the dollar and euro after Britain’s Labour opposition pulled out of key talks with Prime Minister Theresa May.
“The overriding fear for currency traders is that... a hard, no-deal Brexit is back on the table,” said Jasper Lawler, head of research at London Capital Group. “Soft Brexit optimism is fading, pulling the pound lower.”
After some sharp swings, sterling stands about 10 percent lower against the dollar and euro compared with just before the UK Brexit referendum in June 2016. Opposition Labour leader Jeremy Corbyn said he would continue to oppose the government’s Brexit deal although he would “carefully consider any proposals the government wishes to bring forward to break the... deadlock”.
The announcement came after May agreed Thursday to set out a timetable early next month for her departure as prime minister amid uproar in her own Conservative Party.
MPs have three times rejected the divorce deal she struck with Brussels, weakening her authority and forcing her to reach out to Labour. Parliament is due to vote for a fourth time in early June on the terms of Britain’s withdrawal from the EU.
An ashen-faced May said lawmakers would be faced with a “stark choice” of either voting to deliver Brexit, or “to shy away again.”
Published: 19-05-2019 09:38