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Stocks Rise on Wall St. as Economic Data Helps Ease Concerns Stocks Whipsaw as Traders Face Conflicting Trade War Signals
(30 minutes later)
BEIJING — Stocks in the United States rose Thursday, as upbeat economic data and a conciliatory statement from the Chinese government steadied investors’ anxiety about the impact of the trade war on global growth. Stocks in the United States rose on Thursday after a sharp decline the day before, as upbeat economic data and a conciliatory statement from the Chinese government eased investors’ anxiety about the impact on global growth of the trade war between the two countries.
Retail sales in the United States climbed in July, the Commerce Department said, while Walmart reported stronger than expected earnings and raised its outlook for sales this year. The Chinese e-commerce giant Alibaba also released strong financial results. The positive signs included an increase in retail sales in the United States in July, according to the Commerce Department, and stronger-than-expected earnings from Walmart, which raised its outlook for sales this year. The Chinese e-commerce giant Alibaba also released strong financial results.
The S&P 500 rose about half a percent at the start of trading. The early gains came after a turbulent stretch for stocks. Markets around the world have been whipsawed by conflicting signals about the state of the trade war between the United States and China as investors have been confronted by evidence that it is already slowing growth. Wall Street’s early gains were the latest turn in what has been a turbulent stretch for stocks. Markets around the world have been whipsawed by conflicting signals about the state of the trade war between the United States and China as investors confront evidence that the dispute is already slowing growth.
A statement from the Chinese government, released just before the start of Thursday’s trading in the United States, helped. A statement from the Chinese government, released just before the start of trading in the United States on Thursday, helped to lower the tension.
“We hope the U.S. can work in concert with China to implement the two presidents’ consensus that was reached in Osaka, and to work out a mutually acceptable solution through equal-footed dialogue and consultation with mutual respect,” Hua Chunying, the foreign ministry spokesperson, said in the statement. “We hope the U.S. can work in concert with China to implement the two presidents’ consensus that was reached in Osaka, and to work out a mutually acceptable solution through equal-footed dialogue and consultation with mutual respect,” Hua Chunying, the foreign ministry representative, said in the statement. The consensus in question was hashed out by President Trump and Xi Jinping, China’s leader, in June, when they agreed to resume trade talks. Despite the agreement, the two sides remain far apart on major issues.
Still, investors face conflicting signals on the state of the trade dispute. Earlier Thursday, a different statement from China appeared to ratchet up the tension by threatening a response should Mr. Trump carry out his threat to impose 10 percent tariffs on billions of dollars of Chinese imports as of Sept. 1. The statement — attributed to an unidentified official from the Customs Tariff Commission of the State Council, China’s cabinet — did not specify what those countermeasures would be. Still, investors had reason to be wary. Although retail sales rose a better-than-expected 0.7 percent in July from the month before, other data hinted at continuing weakness in the industrial economy. American industrial production fell 0.2 percent in July from the month before, more than economists had expected.
The mixed signals came after Mr. Trump said he would hold off on some of the tariffs, a move that cheered markets hoping that the two sides could be making progress toward a deal. And an earlier statement from Beijing on Thursday had appeared to increase the trade tensions by threatening a response should Mr. Trump carry out his vow to place a 10 percent tariff on billions of dollars of Chinese imports as of Sept. 1. The statement, attributed to an unidentified Chinese cabinet official, did not specify what the countermeasures would be.
The threat of additional tariffs has added to fears about the global economic outlook and pushed markets lower around the world. Those fears were evident on Wednesday, after investors worried about global growth gave Wall Street one of its worst days this year. The S&P 500 index fell 2.93 percent.The threat of additional tariffs has added to fears about the global economic outlook and pushed markets lower around the world. Those fears were evident on Wednesday, after investors worried about global growth gave Wall Street one of its worst days this year. The S&P 500 index fell 2.93 percent.
Investors have other issues on their mind as well. In the United States, bond markets have begun to hint that a recession there could come soon.Investors have other issues on their mind as well. In the United States, bond markets have begun to hint that a recession there could come soon.
On Thursday, the 30-year bond yield fell below 2 percent for the first time on record, reflecting increased demand for Treasuries as investors pull their money from riskier stocks, said Joshua Mahony, a senior market analyst at IG Group in London. “Yields are falling across the board, it’s a flight to safety,” he said.On Thursday, the 30-year bond yield fell below 2 percent for the first time on record, reflecting increased demand for Treasuries as investors pull their money from riskier stocks, said Joshua Mahony, a senior market analyst at IG Group in London. “Yields are falling across the board, it’s a flight to safety,” he said.
The drop below 2 percent for the first time was “historical and rare in nature” and “points toward substantial fear,” he added.The drop below 2 percent for the first time was “historical and rare in nature” and “points toward substantial fear,” he added.
Markets were also hit on Wednesday by glum economic news from Germany and from China.Markets were also hit on Wednesday by glum economic news from Germany and from China.
Complicating that outlook is the situation in Hong Kong, a semiautonomous Chinese territory. Hong Kong residents have been protesting China’s growing involvement in daily life. In recent days, violence has led Chinese state media to make thinly veiled threats about military intervention.Complicating that outlook is the situation in Hong Kong, a semiautonomous Chinese territory. Hong Kong residents have been protesting China’s growing involvement in daily life. In recent days, violence has led Chinese state media to make thinly veiled threats about military intervention.
“There were a handful of catalysts adding to the markets’ roller-coaster ride, including continuing civil unrest in Hong Kong and escalating fears that trade relations with China are becoming even more derailed,” said Tom Stringfellow, chief investment officer at Frost Investment Advisors, in an emailed note, referring to Wednesday’s slump.“There were a handful of catalysts adding to the markets’ roller-coaster ride, including continuing civil unrest in Hong Kong and escalating fears that trade relations with China are becoming even more derailed,” said Tom Stringfellow, chief investment officer at Frost Investment Advisors, in an emailed note, referring to Wednesday’s slump.
Late on Wednesday, Mr. Trump suggested that the fate of the trade war and Beijing’s response to the Hong Kong protests could be linked. “Of course China wants to make a deal,” he wrote on Twitter. “Let them work humanely with Hong Kong first!”Late on Wednesday, Mr. Trump suggested that the fate of the trade war and Beijing’s response to the Hong Kong protests could be linked. “Of course China wants to make a deal,” he wrote on Twitter. “Let them work humanely with Hong Kong first!”
The tenor from many economists has grown more pessimistic as the trade war has escalated. Last week, global currency markets were shaken after Chinese officials raised the specter of a currency war with the United States in response to a new tariff threat from the Trump administration.The tenor from many economists has grown more pessimistic as the trade war has escalated. Last week, global currency markets were shaken after Chinese officials raised the specter of a currency war with the United States in response to a new tariff threat from the Trump administration.
“Markets are reacting on the fear that the additional threats of more tariffs by the Trump administration will result in a slower-growing global economy,” said Steve Cochrane, the chief Asia Pacific economist at Moody’s. “The risk of recession in the U.S. is not overstated,” he said.“Markets are reacting on the fear that the additional threats of more tariffs by the Trump administration will result in a slower-growing global economy,” said Steve Cochrane, the chief Asia Pacific economist at Moody’s. “The risk of recession in the U.S. is not overstated,” he said.
Last week, Goldman Sachs flagged concerns about the United States economy after Mr. Trump threatened to put the 10 percent tariffs on additional Chinese goods. Goldman said the threat added to fears of a recession.Last week, Goldman Sachs flagged concerns about the United States economy after Mr. Trump threatened to put the 10 percent tariffs on additional Chinese goods. Goldman said the threat added to fears of a recession.
Earlier this week, Trump administration officials clarified which tariffs they would increase on Sept. 1, leaving certain Chinese goods off the list until December, like laptops, cellphones and toys.Earlier this week, Trump administration officials clarified which tariffs they would increase on Sept. 1, leaving certain Chinese goods off the list until December, like laptops, cellphones and toys.
That move did little to ease the concerns of some experts.That move did little to ease the concerns of some experts.
“We are in uncharted territory with few historical precedents to guide us,” said Shaun Roache, chief economist for Asia Pacific at S&P Global. “The latest temporary reprieve on tariffs does little to ease this uncertainty.”“We are in uncharted territory with few historical precedents to guide us,” said Shaun Roache, chief economist for Asia Pacific at S&P Global. “The latest temporary reprieve on tariffs does little to ease this uncertainty.”
Asian markets ended mixed, as some clawed back losses from earlier in the day.Asian markets ended mixed, as some clawed back losses from earlier in the day.
In Japan, the Nikkei 225 index fell 1.2. The S&P/ASX 200 index in Australia, one of the first markets to begin trading on Thursday, fell 2.85 percent.In Japan, the Nikkei 225 index fell 1.2. The S&P/ASX 200 index in Australia, one of the first markets to begin trading on Thursday, fell 2.85 percent.
But Hong Kong’s Hang Seng Index ended up 0.8 percent. In China, the Shanghai Composite Index rose 0.3 percent. In South Korea, the Kospi index rose 0.7 percent.But Hong Kong’s Hang Seng Index ended up 0.8 percent. In China, the Shanghai Composite Index rose 0.3 percent. In South Korea, the Kospi index rose 0.7 percent.