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Shares slide and pound dives as trade war and Brexit fears mount - business live Shares slide and pound dives as trade war and Brexit fears mount - business live
(32 minutes later)
Trade war jitters are also pushing the oil price down.
US crude has dropped almost 2.5% today to a two-month low, while Brent crude (sourced from the North Sea) has hit a three-week low under $70.
Weaker economic growth would mean less demand for energy - a blow to oil producers, but good news for consumers.
WTI crude falles below $60 for first time since march - down 2.4% today pic.twitter.com/S2tJUCn1kS
Roberto Azevêdo, director general of the World Trade Organization, has warned that the US-China trade war is hurting the global economy.
Speaking on CNBC, Azevêdo said that “$580bn of restrictive measures” were introduced in the last year, seven times more than the previous year.
This is holding back investors, this is holding back consumers, and of course it is having an impact on the expansion of the global economy.
Everyone loses.... every single country will lose unless we find a solution for this.
"Every single country will lose unless we find a solution for this."U.S.-China trade restrictions are having an impact on the expansion of the global economy at large, WTO chief, @WTODGAZEVEDO says. https://t.co/Y0dsKcxdyj pic.twitter.com/wNe2gQK9xH
Russ Mould, investment director at AJ Bell sums up the day so far:Russ Mould, investment director at AJ Bell sums up the day so far:
The markets are not a pretty sight on Thursday with stocks flashing red across the UK, Europe and parts of Asia.The markets are not a pretty sight on Thursday with stocks flashing red across the UK, Europe and parts of Asia.
Investors are spooked by how relations between the US and China seem to be deteriorating, spurred by the US putting Huawei Technologies on a trade blacklist.Investors are spooked by how relations between the US and China seem to be deteriorating, spurred by the US putting Huawei Technologies on a trade blacklist.
And there’s worse to come, when Wall Street opens in an hour...And there’s worse to come, when Wall Street opens in an hour...
US Opening Calls:#DOW 25520 -0.95%#SPX 2829 -0.93%#NASDAQ 7325 -1.28%#IGOpeningCallUS Opening Calls:#DOW 25520 -0.95%#SPX 2829 -0.93%#NASDAQ 7325 -1.28%#IGOpeningCall
However bad things seem, they can always get worse.However bad things seem, they can always get worse.
And in the case of the trade war, Donald Trump could create a deeper crisis by imposing additional tariffs on imports of cars from Europe and Japan.And in the case of the trade war, Donald Trump could create a deeper crisis by imposing additional tariffs on imports of cars from Europe and Japan.
The president decided to hold off these tariffs for 180 days last week, but auto manufacturers remain concerned that Trump sees them as as security risk.The president decided to hold off these tariffs for 180 days last week, but auto manufacturers remain concerned that Trump sees them as as security risk.
Imposing such tariffs would be a big blow to the global economy, warned economist Willem Buiter of Citi today.Imposing such tariffs would be a big blow to the global economy, warned economist Willem Buiter of Citi today.
Buiter told CNBC that Germany would be particularly badly hit:Buiter told CNBC that Germany would be particularly badly hit:
“If we get in a position of tariffs under the section 232 [national security] act that the U.S. is threatening with, for which it has given a reprieve until November, then that would be serious,”“If we get in a position of tariffs under the section 232 [national security] act that the U.S. is threatening with, for which it has given a reprieve until November, then that would be serious,”
“That would mean tariffs for car imports, for car parts imports, and that would hit Germany the most of any of the large industrial nations. That would be a first-order slap in the economic face,”.“That would mean tariffs for car imports, for car parts imports, and that would hit Germany the most of any of the large industrial nations. That would be a first-order slap in the economic face,”.
Zhu Huani of Mizuho Bank has warned clients to expect more trade war jitters, as America continues to target Chinese tech firms such as Huawei.Zhu Huani of Mizuho Bank has warned clients to expect more trade war jitters, as America continues to target Chinese tech firms such as Huawei.
She wrote:She wrote:
“The stalemate between the U.S. and China looks likely to last longer as both sides continued to ratchet up rhetoric.“The stalemate between the U.S. and China looks likely to last longer as both sides continued to ratchet up rhetoric.
“Despite potential significant negative spillover effect this might have on U.S. firms, the Trump administration seems determined to curb China’s rise in technology advancement.“Despite potential significant negative spillover effect this might have on U.S. firms, the Trump administration seems determined to curb China’s rise in technology advancement.
The US stock market is expected to suffer fresh losses when trading begins in two hour’s time.The US stock market is expected to suffer fresh losses when trading begins in two hour’s time.
The Dow Jones industrial average is tipped to fall by almost 1%, with the broader S&P 500 index called down 0.9%.The Dow Jones industrial average is tipped to fall by almost 1%, with the broader S&P 500 index called down 0.9%.
Germany’s DAX index is on track for its biggest one-day drop since February, Reuters points out.Germany’s DAX index is on track for its biggest one-day drop since February, Reuters points out.
Donald Trump’s famous claim that trade wars are “good, and easy to win” is looking increasingly mistaken.Donald Trump’s famous claim that trade wars are “good, and easy to win” is looking increasingly mistaken.
A year on, Beijing has not backed down, and US farmers are suffering the impact of higher tariffs on crucial products such as soybeans.A year on, Beijing has not backed down, and US farmers are suffering the impact of higher tariffs on crucial products such as soybeans.
Harvard professor Jeffrey Frankel has written about how Trump’s trade war has backfired “spectacularly”:Harvard professor Jeffrey Frankel has written about how Trump’s trade war has backfired “spectacularly”:
His trade war with China has hurt almost every segment of the US economy and created very few winners. The losers include not only consumers but also firms and the workers they employ, from farmers losing their export markets to manufacturers forced to pay higher input costs. Even the US auto industry, which did not ask for Trump’s “protection”, is worse off overall because it has to pay more for imported steel and auto parts.His trade war with China has hurt almost every segment of the US economy and created very few winners. The losers include not only consumers but also firms and the workers they employ, from farmers losing their export markets to manufacturers forced to pay higher input costs. Even the US auto industry, which did not ask for Trump’s “protection”, is worse off overall because it has to pay more for imported steel and auto parts.
As a result, Trump has come close to accomplishing something seemingly impossible: tariffs that benefit almost no one. Protectionism is usually explained as the result of special interests wielding disproportionate power. Trump’s tariffs against Chinese goods do not fit this theory. And a theory that does explain them may not exist.As a result, Trump has come close to accomplishing something seemingly impossible: tariffs that benefit almost no one. Protectionism is usually explained as the result of special interests wielding disproportionate power. Trump’s tariffs against Chinese goods do not fit this theory. And a theory that does explain them may not exist.
Trump's trade policy is a hot mess of conflicting goals – with few winners | Jeffrey FrankelTrump's trade policy is a hot mess of conflicting goals – with few winners | Jeffrey Frankel
Seema Shah, senior global investment strategist at Principal Global Investors, has warned that the US-China trade war is likely to intensify.Seema Shah, senior global investment strategist at Principal Global Investors, has warned that the US-China trade war is likely to intensify.
She is sceptical that the impact of the dispute will be limited to only Chinese firms, saying the impact on US business should not be understated.She is sceptical that the impact of the dispute will be limited to only Chinese firms, saying the impact on US business should not be understated.
Several U.S. technology sub-sectors have significant exposure to China via supply chains. For many large U.S. chipmakers, more than 30% of their sales are in China, and for a few that number is closer to 60%. If the U.S. government chooses to roll out this “export control” strategy to more companies, the effect on U.S. tech – and the knock-on effect on the wider market - could be devastating.Several U.S. technology sub-sectors have significant exposure to China via supply chains. For many large U.S. chipmakers, more than 30% of their sales are in China, and for a few that number is closer to 60%. If the U.S. government chooses to roll out this “export control” strategy to more companies, the effect on U.S. tech – and the knock-on effect on the wider market - could be devastating.
But won’t Donald Trump back down, if he sees Wall Street bathed in red? Not necessarily, given wider concerns over China.But won’t Donald Trump back down, if he sees Wall Street bathed in red? Not necessarily, given wider concerns over China.
“First, when it comes to technology and defence related issues, not only is there a fair degree of consensus across Congress to be tough on China, but many large economies share America’s concerns about China’s practises. Second, U.S. demands around technology and defence will be very difficult to meet given that they are focused on containing China’s aspirations to be a global technology leader, and therefore too existential for China to concede.“First, when it comes to technology and defence related issues, not only is there a fair degree of consensus across Congress to be tough on China, but many large economies share America’s concerns about China’s practises. Second, U.S. demands around technology and defence will be very difficult to meet given that they are focused on containing China’s aspirations to be a global technology leader, and therefore too existential for China to concede.
“While a compromise on tariffs is still possible, investors should prepare for a longer, more hostile, technology war–with some meaningful collateral damage.”“While a compromise on tariffs is still possible, investors should prepare for a longer, more hostile, technology war–with some meaningful collateral damage.”
European stock markets have slumped deeper into the red, as hopes of a trade war breakthrough fade.European stock markets have slumped deeper into the red, as hopes of a trade war breakthrough fade.
Britain’s blue-chip FTSE 100 has now shed more than one hundred points, or 1.35%, in a wide-raging rout.Britain’s blue-chip FTSE 100 has now shed more than one hundred points, or 1.35%, in a wide-raging rout.
Germany’s DAX and France’s CAC indices are having an even worse day, down 1.7%, following the losses in Asia overnight.Germany’s DAX and France’s CAC indices are having an even worse day, down 1.7%, following the losses in Asia overnight.
China’s threat not to resume trade talks with America (see here), the swathe of tech companies ditching Huawei (see here), and rising fears of a no-deal Brexit (see here) are all hitting investor confidence.China’s threat not to resume trade talks with America (see here), the swathe of tech companies ditching Huawei (see here), and rising fears of a no-deal Brexit (see here) are all hitting investor confidence.
The news that eurozone factory output is still shrinking as orders contract (see here) isn’t helping the mood either.The news that eurozone factory output is still shrinking as orders contract (see here) isn’t helping the mood either.
A deepening trade war, and an escalating Brexit crisis, would both hurt economic growth, damage companies across the globe, weaken profits, and hit consumers in the pocket.A deepening trade war, and an escalating Brexit crisis, would both hurt economic growth, damage companies across the globe, weaken profits, and hit consumers in the pocket.
Dean Popplewell of trading firm OANDA says investors are much gloomier about the trade war.Dean Popplewell of trading firm OANDA says investors are much gloomier about the trade war.
U.S equity futures and European bourses are again under pressure, following Asian stocks lower, as Sino-U.S trade tensions show little sign of easing.U.S equity futures and European bourses are again under pressure, following Asian stocks lower, as Sino-U.S trade tensions show little sign of easing.
The street is now officially worried that what started as a ‘tiff over tariffs’ is turning into a full-blown trade war. U.S Treasuries are steady while the ‘big’ dollar remains King.The street is now officially worried that what started as a ‘tiff over tariffs’ is turning into a full-blown trade war. U.S Treasuries are steady while the ‘big’ dollar remains King.
Chinese state media are ramping up their criticism of America today too, another sign that the trade war is escalating.Chinese state media are ramping up their criticism of America today too, another sign that the trade war is escalating.
My colleague Lily Kuo reports from Beijing:My colleague Lily Kuo reports from Beijing:
An editorial in the People’s Daily on Wednesday accused the US of “bullyism”, while a bulletin on the state broadcaster CCTV said the US was “delusional” if it believed “technological bullying” could contain China. “This shows some American politicians are extremely narrow-minded and cannot tolerate the normal pursuit of development and progress of other countries,” the announcer said.An editorial in the People’s Daily on Wednesday accused the US of “bullyism”, while a bulletin on the state broadcaster CCTV said the US was “delusional” if it believed “technological bullying” could contain China. “This shows some American politicians are extremely narrow-minded and cannot tolerate the normal pursuit of development and progress of other countries,” the announcer said.
The harsher sentiments appear to be resonating with the public. Earlier in the week, a song written by a former Chinese official about the trade war, set to the tune of a fight song featured in an anti-Japanese wartime film, had been viewed thousands of times on WeChat.The harsher sentiments appear to be resonating with the public. Earlier in the week, a song written by a former Chinese official about the trade war, set to the tune of a fight song featured in an anti-Japanese wartime film, had been viewed thousands of times on WeChat.
A clip of a CCTV news segment from last week promising that China would “fight to the end” was one of the top viewed posts on the microblogging site Weibo. And last weekend, a CCTV film channel aired a series of documentaries about the Korean war, when Chinese and US forces clashed. “We are using movies to echo the current era,” the broadcaster said on its Weibo account on Saturday.A clip of a CCTV news segment from last week promising that China would “fight to the end” was one of the top viewed posts on the microblogging site Weibo. And last weekend, a CCTV film channel aired a series of documentaries about the Korean war, when Chinese and US forces clashed. “We are using movies to echo the current era,” the broadcaster said on its Weibo account on Saturday.
'We'll fight to the end': China's media ramps up rhetoric in US trade war'We'll fight to the end': China's media ramps up rhetoric in US trade war
China’s Commerce Ministry has raised the stakes in the trade war with America.China’s Commerce Ministry has raised the stakes in the trade war with America.
Ministry of Commerce spokesperson Gao Feng has declared that negotiations can’t continue unless Washington changes its position, and amends its mistakes.Ministry of Commerce spokesperson Gao Feng has declared that negotiations can’t continue unless Washington changes its position, and amends its mistakes.
He told reporters:He told reporters:
“If the U.S. would like to keep on negotiating it should, with sincerity, adjust its wrong actions. Only then can talks continue.:“If the U.S. would like to keep on negotiating it should, with sincerity, adjust its wrong actions. Only then can talks continue.:
Gao then appeared to single out the sanctions on Huawei, saying they are unacceptable:Gao then appeared to single out the sanctions on Huawei, saying they are unacceptable:
The U.S. ... crackdown on Chinese companies not only seriously damages the normal commercial cooperation between both countries, but it also forms a great threat to the security of the global industrial and supply chain.The U.S. ... crackdown on Chinese companies not only seriously damages the normal commercial cooperation between both countries, but it also forms a great threat to the security of the global industrial and supply chain.
China is firmly opposed to this. We will closely monitor developments and make adequate preparations.”China is firmly opposed to this. We will closely monitor developments and make adequate preparations.”
That sounds like a significant move - is Beijing really refusing to hold fresh talks unless Donald Trump backs down?That sounds like a significant move - is Beijing really refusing to hold fresh talks unless Donald Trump backs down?
China says U.S. is unilaterally escalating trade dispute and impacting trade talks as well as putting a drag on world economy Only if Washington corrects its mistakes and shows sincerity can trade talks continue, MOFCOM spokesman Gao Feng says at Thursday's briefing pic.twitter.com/KQCti8tKqoChina says U.S. is unilaterally escalating trade dispute and impacting trade talks as well as putting a drag on world economy Only if Washington corrects its mistakes and shows sincerity can trade talks continue, MOFCOM spokesman Gao Feng says at Thursday's briefing pic.twitter.com/KQCti8tKqo
Metro Bank shares are a rare bright spot across European markets this morning, up nearly 7%. Its shares have jumped more than 80% since successfully raising £375m in a share placing last week.Metro Bank shares are a rare bright spot across European markets this morning, up nearly 7%. Its shares have jumped more than 80% since successfully raising £375m in a share placing last week.
But it’s not all good news at the challenger bank, which has been warned it will face renewed pressure to give its chairman the boot:But it’s not all good news at the challenger bank, which has been warned it will face renewed pressure to give its chairman the boot:
The fight to oust Metro Bank chairman Vernon Hill isn't over. Shareholder @RLAM_UK confirms it will keep pushing for a “new independent chairman” after 12% of investors voted against his re-election & over 3.5m abstained at last week’s AGMThe fight to oust Metro Bank chairman Vernon Hill isn't over. Shareholder @RLAM_UK confirms it will keep pushing for a “new independent chairman” after 12% of investors voted against his re-election & over 3.5m abstained at last week’s AGM
Royal London Asset Management, which holds a 0.39% stake worth approximately £3.1m, said:Royal London Asset Management, which holds a 0.39% stake worth approximately £3.1m, said:
“The high number of votes against directors at Metro Bank’s AGM should send a strong and clear signal that many of the company’s shareholders want to see decisive governance reform.“The high number of votes against directors at Metro Bank’s AGM should send a strong and clear signal that many of the company’s shareholders want to see decisive governance reform.
“We support the move by the board to review the contract with InterArch, the company run by the chairman’s wife. However, we still strongly believe that the appointment of a new independent chairman to lead governance reforms would go some way towards strengthening oversight, and restoring investor and customer confidence in the bank.“We support the move by the board to review the contract with InterArch, the company run by the chairman’s wife. However, we still strongly believe that the appointment of a new independent chairman to lead governance reforms would go some way towards strengthening oversight, and restoring investor and customer confidence in the bank.
“We have communicated our views with the company and will continue to engage with the board over the coming months.”“We have communicated our views with the company and will continue to engage with the board over the coming months.”
The bank is still nursing wounds from Tuesday AGM, which attracted protest votes across the board. Every resolution attracted at least 7% of votes against, if not more. You can see those votes here.The bank is still nursing wounds from Tuesday AGM, which attracted protest votes across the board. Every resolution attracted at least 7% of votes against, if not more. You can see those votes here.
Asian stock markets ended the day solidly in the red, after Panasonic ditched ties with Huawei and China warned it would “fight to the end” in the trade war with the US.Asian stock markets ended the day solidly in the red, after Panasonic ditched ties with Huawei and China warned it would “fight to the end” in the trade war with the US.
Asian markets finished broadly lower today with shares in Hong Kong leading the region. The Hang Seng is down 1.65% while China's Shanghai Composite is off 1.36% and Japan's Nikkei 225 is lower by 0.62%. pic.twitter.com/OlAjBDdn4IAsian markets finished broadly lower today with shares in Hong Kong leading the region. The Hang Seng is down 1.65% while China's Shanghai Composite is off 1.36% and Japan's Nikkei 225 is lower by 0.62%. pic.twitter.com/OlAjBDdn4I
Bad news for Brits heading to Europe this summer -- sterling is continuing its record-breaking losses against the euro.Bad news for Brits heading to Europe this summer -- sterling is continuing its record-breaking losses against the euro.
Brexit anxiety has pushed the pound down by another 0.2% against the euro again to just €1.1307, the lowest since January.Brexit anxiety has pushed the pound down by another 0.2% against the euro again to just €1.1307, the lowest since January.
This is its 14th day of losses in a row - its worst-ever run.This is its 14th day of losses in a row - its worst-ever run.