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Tariff Fears and a Jobs Report Send Stocks Lower

April 08, 2018 18:37·
S&P says global credit outlook stable, but geopolitical risks over US-China trade war remain high

S&P says global credit outlook stable, but geopolitical risks over US-China trade war remain high

USA stock futures fell more than 1 per cent late on Thursday after President Donald Trump said he had instructed U.S. trade officials to consider $100 billion in additional tariffs on China.

USA stocks tumbled Friday, with the Dow Jones industrial average falling more than 700 points, or about 3% at its lowest point, as fears of a global trade war continued to mount.

Earlier this week, the Trump administration announced plans for tariffs on $50 billion worth of Chinese goods in retaliation for China's alleged theft of U.S. intellectual property. Shares of Facebook fell 0.9%, extending a downtrend, as its user-information problems continued, even after CEO Mark Zuckerberg took to media outlets to apologize for the social network's recent missteps. Johnson & Johnson sank $2.99, or 2.3 percent, to $127.72 and health insurer UnitedHealth dropped $59, or 2.6 percent, to $223.18.

"I feel like this is a typical reaction, but I think that it will come back around", said Zach Holt. China responded by indicating it wouldn't back down, saying it would fight back "at any cost", according to a statement from the Commerce Ministry.

Nixon, of Northern Trust, said businesses also support the idea of making changes in America's trade relationship with China.

The US economy added just 103,000 jobs in March, well below the 170,000 forecast by economists polled by Bloomberg MarketWatch.

"Investors breathed a sigh of relief", Stovall said.

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Trump said he was considering tariffs on $100 billion more in Chinese exports, which would triple what the United States is already planning.

The unemployment rate remained low and the job market looks fundamentally healthy, but it is possible some employers are struggling to find workers. China is the second largest importer of USA oil, after Canada. Oil prices fell nearly 5 per cent this week as investors wondered if an increase in trade tensions will reduce demand for oil by slowing down the global economy.

Bond prices rose, sending yields lower.

Over the course of the day 202 shares traded hands, as compared to an average volume of 2,300 over the last 30 days for Rex Gold Hedged S&P 500 ETF (NYSEARCA:GHS).

Reflecting the strength in the energy sector, the Philadelphia Oil Service Index has surged up by 2.7%, while the NYSE Arca Natural Gas Index and the NYSE Arca Oil Index are up by 1.6% and 1.4%, respectively. Natural gas rose 3 cents to $2.70 per 1,000 cubic feet.

Shares of Facebook also rose, adding 1.7%. Silver edged up one cent to 16.36 dollars an ounce. Boeing and Caterpillar, considered vulnerable in any trade war with China, fell by 3.1% and 3.5%, respectively. The euro rose to $1.2285 from $1.2256. France's CAC 40 gained 2.6%, Germany's DAX surged 2.9% and the UK's FTSE 100 advanced 2.35%.

This represents a $0.71 dividend on an annualized basis and a dividend yield of 1.29%.

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