FYI: Global stocks dropped Monday after the sudden intensification of U.S.-China trade tensions, as investors assessed whether the conflict could dent economic growth.
U.S. futures and stock markets in Asia and Europe were lower, oil prices fell and the Chinese yuan weakened after President Trump threatened to ramp up U.S. tariffs on $200 billion in Chinese imports to 25%, up from 10% currently. That put an accord between the two countries in doubt ahead of a new round of talks set to begin this week in Washington.
China’s delegation was preparing to go to the U.S. for the talks, the foreign ministry spokesman said Monday, adding that the Chinese government hoped both sides could work together to reach an agreement after threats repeatedly rose in the past.
U.S. futures pointed to opening losses of 1.9% and 1.7% for the Dow Jones Industrial Average and S&P 500, respectively.
Companies with high exposure to the Chinese market slid the most in U.S. premarket trading, with Nvidia Corp. NVDA -0.10% falling 4.4%. Boeing Co. also shed 3.3%. No S&P 500 component edged higher, according to FactSet.
The Shanghai Composite Index fell 5.6%, while its counterpart in Shenzhen tumbled 7.4%, both registering their biggest single-day declines since 2016.
Europe’s pan-continental Stoxx Europe 600 lost 1.5%. All national benchmarks in the region, except for London’s FTSE 100, which was closed for a public holiday, were in the red.
Hong Kong’s Hang Seng Index dropped more than 3%. WH Group, the Chinese owner of American pork producer Smithfield Foods, tumbled more than 7% to a five-week low.
Brent crude, the global oil benchmark, slid 0.7% to $70.38 a barrel, after falling around 2%, while West Texas Intermediate lost 1% edging down to $61.31 a barrel.
Elsewhere, the WSJ dollar index, which tracks the currency against a basket of 16 of its peers, added 0.2%. Yields for U.S. Treasurys were flat at 2.523%, given market holidays in Tokyo and London. Yields move inversely to prices.
Regards,
Ted
WSJ:
https://www.wsj.com/articles/global-markets-tumble-after-trumps-threat-to-raise-tariffs-on-china-11557108903Bloomberg:
https://www.bloomberg.com/news/articles/2019-05-05/yuan-sinks-with-u-s-index-futures-on-tariff-risk-markets-wrapIBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-trump-tariffs-china-trade-talks-apple-stock-market/CNBC:
https://www.cnbc.com/2019/05/05/traders-brace-for-sharp-sell-off-on-trumps-tariff-threat.htmlU.K.: (Closed)
Europe:
https://www.reuters.com/article/europe-stocks/update-1-european-shares-slide-as-u-s-china-trade-tensions-return-idUSL5N22I1BLAsia:
https://www.marketwatch.com/story/asian-markets-plunge-as-us-china-trade-deal-appears-in-jeopardy-2019-05-05/printBonds:
https://www.cnbc.com/2019/05/06/us-bonds-trader-digest-new-us-tariffs-on-china.htmlCurrencies:
https://www.cnbc.com/2019/05/06/forex-market-trump-tariff-threats-us-china-trade-war-in-focus.htmlOil:
https://www.cnbc.com/2019/05/06/oil-market-trump-tariff-threats-us-output-in-focus.htmlGold:
https://www.cnbc.com/2019/05/06/gold-market-trump-tariff-threats-us-china-trade-in-focus.htmlCuirrent Futures:
https://finviz.com/futures.ashx 
