New York turns red with renewed trade tensions

The clues

In Toronto, the S&P / TSX ended the session with a gain of 41 points, or 0.25%, to 16,899 points.

In New York, the S&P 500 lost 14 points, or 0.49%, to 2,992 points.

The Dow Jones fell 159 points, or 0.59%, to 26,935 points.

The Nasdaq lost 65 points, or 0.8%, to 8,117 points.

The context

Over the week as a whole, the Dow Jones lost 1.04%, the Nasdaq 0.72% and the S & P 500 0.50%, these indices showing weekly losses for the first time in a month.

Confirmation that the Chinese delegation would shorten his stay in the US has made Wall Street dive near balance early in the session.

This announcement indicates “that there may be other issues (in the Sino-US trade dispute, Ed), because at the same time Donald Trump said he does not want a trade agreement before the US presidential election ( November 2020, Ed), according to Quincy Krosby of Prudential.

“We want a total agreement, a partial agreement does not interest me,” said Friday the tenant of the White House. “It could go fast, but it would not be the right deal. We have to do things well, “he explained, stressing the extreme complexity of the file.

A technical meeting between Chinese and American negotiators, which began Thursday, however, continued Friday in Washington, confirmed to AFP a representative of the services of the Trade Representative (USTR).

The market was also following closely the comments of several members of the US Federal Reserve (Fed) about the drop in overnight rates of a quarter of a percentage point announced Wednesday.

If the president of the Boston Fed, who opposed the decline, estimated that the US economy “does not need additional monetary stimulus”, that of the Fed Saint Louis, favorable to a a more significant decrease, considered that it would have been better “to guard against further expected declines in inflation and against a slowdown in the economy.”

Overall, “the market seemed pleased with a Fed that said pay attention to new economic data while scrutinizing the consequences of trade tensions,” said Krosby.

The volatility in the markets was also higher than usual due to the so-called four witches session: like four times a year, several types of futures and options on the indices or shares expired on Friday, forcing investors to get rid of certain positions.

In the bond market, the 10-year rate on US debt stood at 1.720% around 16.30, slightly lower than the previous day’s closing (1.784%).

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