World stock markets broadly edged lower yesterday as concerns of a further escalation of a trade fight between the United States and China offset corporate results, while the US dollar gained and Treasury yields dipped on the uncertainty.
Sterling dropped to an 11-month low after the British trade minister warned that the nation was headed for a no-deal Brexit, stoking investor fears that Britain could soon leave the European Union without securing a trade agreement.
US Treasury yields dipped, with the 10-year yield holding below three per cent on moderate buying, on trade concerns and in advance of this week’s August refunding, where the government will sell $78 billion in coupon-bearing securities.
The Dow Jones Industrial Average fell 4.64 points, or 0.02 per cent, to 25,457.94, the S&P 500 gained 5.06 points, or 0.18 per cent, to 2,845.41 and the Nasdaq Composite added 19.98 points, or 0.26 per cent, to 7,831.99.
MSCI’s gauge of stocks across the globe shed 0.04 per cent, while the pan-European FTSEurofirst 300 index lost 0.20 per cent.
Prolonged trade dispute rattles financial markets across the globe
The prolonged trade dispute between Washington and China has rattled financial markets across the globe.
Chinese state media attacked President Donald Trump’s trade policies yesterday, calling the US plan ineffective “extortion,” in a bid to reassure investors as growth concerns battered China’s financial markets.
The media campaign comes days after China proposed tariffs on $60 billion worth of US imports in retaliation to the Trump administration’s plans to impose 25 per cent tariffs on $200 billion of Chinese imports.
Chinese stocks slumped nearly 1.3 per cent yesterday.
Still, US equities have been able to offset some of the fallout of the trade spat with a strong earnings season to date.
Of the more than 400 S&P 500 companies that have reported so far, 78.6 per cent have topped earnings estimates. That is well above the average of 72 per cent for the past four quarters.
Berkshire Hathaway Inc rose 3.6 per cent after the Warren Buffett-led conglomerate reported a 67 per cent surge in quarterly operating profit on Saturday.
European shares followed their Asian counterparts lower but a falling euro boosted exporters and helped halt the slide. The pan-European share indexes were down 0.14 per cent and 0.07 per cent respectively.
Oil prices gained, helped by an unexpected decline in Saudi crude production.
US crude rose 1.75 per cent to $69.69 per barrel and Brent was last at $74.05, up 1.15 per cent on the day.