By : The Dow sped toward another brutal loss on Thursday after Beijing bared its fangs to deliver the shellshocked administration a withering rebuke that drastically reduced the likelihood of an amicable trade war resolution.
Dow Tailspin Intensifies
Every major index braced for heavy losses on Thursday. As of 9:23 am ET, futures had plunged 255 points or 0.99%, implying a painful 253.61 point loss at the opening bell. S&P 500 futures lost 0.93%, and Nasdaq futures plummeted 1.17% as Wall Street choked on the latest escalation in the conflict between the United States and .
The Dow is on track to record another painful loss on Thursday. | Source: Yahoo Finance
Beijing Bares its Fangs
Today, stocks fell across the board amid a rapidly-escalating US- trade war.
Beijing intensified its hostile rhetoric when a Ministry of Commerce spokesperson condemned the US for its “wrong actions” and warned the administration that would not return to the negotiating table until the White House atoned for its transgressions.
“If the U.S. would like to keep on negotiating it should, with sincerity, adjust its wrong actions. Only then can talks continue,” spokesperson Gao Feng said Thursday in Mandarin, according to .
Earlier this week, Chinese President Xi Jinping delivered an in which he warned to prepare for a “new Long March” that would mire the country in “difficult situations.” However, Xi declined to lob a direct attack at the US or the administration, as the Ministry of Commerce did on Thursday.
warned the US that it would need to atone for its transgressions if it hopes to continue trade war negotiations. | Source: AP Photo / Andy Wong
The administration, as CCN reported, recently hiked tariffs on Chinse imports in retaliation for Beijing’s sudden change-of-heart on a draft agreement for a new trade deal. Later, the White House used a national emergency order to place controversial Chinse tech giant Huawei on a government blacklist, though it has since given US firms a 90-day window to get their affairs in order before the blacklist takes effect.
It’s unlikely that President will roll back those punitive actions without key concessions from – concessions that led Beijing to shred the draft agreement in the first place.
Trade War Could Roil Stock Market Until 2020 Election – or Much, Much Longer
It’s astounding how quickly the trade war narrative has soured. A swift resolution to the conflict looked like a near-certainty just a few weeks ago; now, with tensions escalating by the day, it seems like pure fantasy to expect the two economic competitors to arrive at an agreement anytime soon.
Nomura predicts that the trade war could extend deep into the 2020 election and estimates that there is a 65% chance that slaps tariffs on $300 billion worth of Chinese goods by the end of 2019.
“The U.S.- relationship has moved further off track over the past two weeks after a period of what appeared, on the surface, to be steady progress towards reaching an admittedly narrow agreement,” Nomura economists wrote in a note, according to . “We do not think the two sides will be able to get back to where they seemed to be in late April.”
Neither of those forecasts bode well for the stock market, but they’re relatively tame compared to the one Chinese government researcher revealed this morning. Zhang Yansheng warned that the US and could remain locked in the trade war until 2035, forcing Wall Street to reckon with another 15 years of a crippling tariff regime.
Thursday’s sell-off shoved the Dow toward its second consecutive triple-digit decline. On May 22, the DJIA slid 100.72 points or 0.39% to settle at 25,776.61. The and also recorded losses, falling 0.28% to 2,856.27 and 0.45% to 7,750.84.
Click for a real-time Dow Jones Industrial Average (DJIA) price chart.
Published at Thu, 23 May 2019 13:30:03 +0000
