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Global Markets Follow Wall Street’s Sell-Off After Trump Tweets Global Markets Slide After a Wall Street Sell-Off Spurred by Trump Tweets
(about 4 hours later)
HONG KONG — President Trump fires off a tweet from the White House. Markets shudder. HONG KONG — President Trump fires off a tweet, and markets shudder.
Stocks around the world on Wednesday continued their tumble after Mr. Trump posted a series of tweets warning that a fragile cease-fire in the trade war with China could easily be derailed. They followed a sharp drop on Wall Street on Tuesday, where stocks fell more than 3 percent. Stocks around the world tumbled on Wednesday, a day after Mr. Trump posted a series of messages on Twitter warning that a fragile cease-fire in the trade war between the United States and China could be derailed. The declines in Asia and Europe came after stocks on Wall Street fell more than 3 percent on Tuesday.
Still, investors in Asia appeared to be less fearful than those in the United States, after vague official comments from the Chinese government that nevertheless expressed confidence in the talks. Hong Kong led the selling, and by midday the main exchange was down 1.6 percent. China’s biggest companies listed in Hong Kong were among the biggest losers. But global investors appeared to be calmer than their counterparts in the United States, after official comments by the Chinese government that were vague but nevertheless expressed confidence that talks between the two countries would yield a positive outcome.
Futures markets tracking the performance of stocks in Europe showed the markets there were poised for a sell-off. The United States looked ready to extend losses when markets there open, though they were set to be closed on Wednesday in honor of the death of former President George Bush. In Britain, France and Germany, stocks opened 1.3 percent to 1.5 percent lower. In Hong Kong and in Taipei, Taiwan, investors sent the market down 1.6 percent. Markets in Seoul, South Korea, and Tokyo finished about half a percent lower.
Conflicting trade news has sent investors on a wild ride this week. Only two days ago they rose on optimism after Mr. Trump and President Xi Jinping struck a truce over dinner in Buenos Aires on the sidelines of the G20 meeting. China’s currency, the renminbi, weakened slightly, by 0.3 percent, against the United States dollar on Wednesday. It trades within a band set by the People’s Bank of China. It had reached a two-month peak earlier this week.
Since then the White House has sent conflicting signals as to what, exactly, the two sides agreed to do. Mr. Trump also chose a trade hard-liner to lead the fresh talks. China’s Ministry of Commerce has said negotiations would follow a timeline. Both sides have 90 days to work out a resolution. Futures contracts that predict the performance of stocks in the United States indicated that shares there would rise when markets reopen on Thursday. They were to be closed on Wednesday in observance of the death of former President George Bush.
The biggest concern plaguing investors is the worry that the ongoing trade war could erode global growth just as the world’s biggest economies are starting to slow down. In China, there are growing worries that the trade war will weigh on an economy that is already under stress from a plunging stock market, a weakening currency and dampened consumer appetite. Conflicting signals on the trade front have sent investors on a wild ride this week. Just two days ago stocks rode a wave of optimism up after Mr. Trump and President Xi Jinping of China agreed a truce over dinner in Buenos Aires on the sidelines of the G20 meeting.
Since then, the White House has offered a mixed message about what, exactly, the two sides have agreed to. Mr. Trump has also chosen a trade hard-liner to lead the next round of talks. China’s Ministry of Commerce has said negotiations would follow a timeline. The two sides have 90 days to work out a resolution.
The biggest concern plaguing investors is that an extended trade war could erode global growth just as the world’s biggest economies are already starting to cool. In China, there are increasing worries that the dispute will weigh on an economy that is under stress from a plunging stock market, a weakening currency and dampened consumer appetite.
“While investing we try to avoid the noise, but these trade war issues in China and Japan have the potential of such large impact on certain industries it’s increasingly difficult to ignore,” said Seth Fischer, the chief investment officer at Oasis Management, a hedge fund based in Hong Kong. Mr. Fischer was referring to potential tariffs on the automobile industry that could affect the entire supply chain across Asia.“While investing we try to avoid the noise, but these trade war issues in China and Japan have the potential of such large impact on certain industries it’s increasingly difficult to ignore,” said Seth Fischer, the chief investment officer at Oasis Management, a hedge fund based in Hong Kong. Mr. Fischer was referring to potential tariffs on the automobile industry that could affect the entire supply chain across Asia.
In Taipei, Taiwan, investors sent the market down 1.6 percent. In Seoul, South Korea, and Tokyo, the markets were down about 0.6 percent. Mr. Trump referred to himself in one tweet on Tuesday as “a Tariff Man” In another, he wrote, “We are either going to have a REAL DEAL with China, or no deal at all — at which point we will be charging major Tariffs against Chinese product being shipped into the United States.”
China’s currency, the renminbi, weakened slightly against the United States dollar by 0.3 percent. It trades within a band set by the People’s Bank of China. Earlier this week it reached a two-month peak. Investors in the United States sent Treasury yields sharply down on Tuesday, a sign of broader concerns about growth. The difference between short- and long-term interest rates reached its lowest point since before the financial crisis, a signal that investors have warned precedes a recession.
Referring to himself in one tweet as “a Tariff Man,” Mr. Trump on Tuesday wrote in another: “We are either going to have a REAL DEAL with China, or no deal at all — at which point we will be charging major Tariffs against Chinese product being shipped into the United States.”
In the United States, investors sent Treasury yields sharply down — signaling broader concerns about growth. The difference between short and long term interest rates reached the lowest point since before the financial crisis, a signal that investors have warned comes before a recession.