By IFCMarkets
SP 500 logs monthly gain
US markets reversed most of previous day gains on Thursday as trade war concerns came to fore again after US imposed tariffs on steel and aluminum imports from the European Union, Canada and Mexico starting Friday. Dow Jones industrial average lost 1% to 24415.84. The S&P 500 slid 0.7% to 2705.27, but closed 2.2% higher for the month. The Nasdaqcomposite fell 0.3% to 7442.12. The dollar weakening slowed: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.1% to 93.96 but is rebounding currently. Stock index futures point to higher openings today.
Global trade war scenarios got more real after Canadian Prime Minister Justin Trudeau said Ottawa would impose a 25% tariff on steel imports from the US, a 10% tariff on aluminum and other US goods, Mexico said it would target several US goods in response and the EU has announced it may target industries such as whiskey and motorcycles. Market reaction to positive economic news was muted: spending on consumer goods rose sharply for a second straight month in April, up 0.6%, the PCE index, the Fed’s preferred inflation gauge, was up 0.2% on month instead of expected 0.1%, and the Chicago purchasing managers index came in at 62.7, compared with the previous level of 57.6.
DAX slumps most as European indices slip
European stock indices ended lower on Thursday as US imposed earlier announced tariffs on EU steel and aluminum imports. Both the euro and British Pound continued rebound against the dollar with euro up currently while Pound is lower. The Stoxx Europe 600 index lost 0.6%. Germany’s DAX 30 dropped 1.4% to 12604.89. France’s CAC 40 fell 0.5% and UK’sFTSE 100 slid 0.2% to 7678.20. Markets opened 0.5% – 0.9% higher today.
Jean-Claude Juncker, president of the European Commission, tweeted that EU will defend Europe’s interests. The EU has threatened to impose $3.5 billion of tariff on US agriculture, steel and industrial products. In response Trump has threatened to impose import tax on European cars. In Italy the antiestablishment League and 5 Star Movement have agreed to revive a coalition government, withdrawing the candidacy of Paolo Savona for finance minister. In economic news inflation jumped to 1.9% in April in euro-zone, closer to ECB’s 2% target.
Asian markets down
Asian stock indices are mostly lower today. Nikkei slid 0.1% to 22171.35 in choppy trade despite resumed yen slide against the dollar. Chinese stocks are lower as Caixin China manufacturing PMI held steady in May : the Shanghai Composite Indexis 0.7% lower while Hong Kong’s Hang Seng Index is up 0.2%. Australia’s All Ordinaries Index is down 0.4% despite Australian dollar continued slide against the greenback.
Market Analysis provided by IFCMarkets
Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.
Free Reports:
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
