The Closing Bell: Stocks Slide After U.S. Expands Export Blacklist

Ted

FYI: U.S. stocks fell after a fresh flare-up in tensions between Washington and Beijing threatened to undermine this week’s trade talks.

The Dow Jones Industrial Average declined 314 points, or 1.19%, in afternoon trading. The S&P 500 lost 1.56% and Nasdaq Composite fell 1.61%.

The latest spat between the world’s two largest economies began late Monday when the Commerce Department added 28 Chinese entities to an export blacklist, citing their role in Beijing’s repression of Muslim minorities in northwest China. The U.S. said the move wasn’t related to trade negotiations with Beijing.

Chinese Foreign Ministry spokesman Geng Shuang then urged the U.S. to withdraw its move against the Chinese firms. “China will continue to take firm and strong measures to uphold its national sovereignty, our security and development interests,” he said Tuesday.

High-level trade talks are set to resume Thursday, with a delegation led by China’s top trade envoy, Liu He, scheduled to meet with U.S. officials in Washington.

he new leader of the International Monetary Fund on Tuesday cited trade tensions as a key risk to growth in a debut speech warning of a deteriorating global economic outlook.

“The global economy is now in a synchronized slowdown,” said Kristalina Georgieva of Bulgaria, who took the helm of the IMF a week ago.

Financials were among the worst-performing sectors of the S&P 500, falling 1.8%. JPMorgan Chase lost 1.6%, while Bank of America was down 1.8%.

Construction-equipment maker Caterpillar, often considered a bellwether for global trade, dropped 1.2%. General Motors, which is in the fourth week of a strike by the United Auto Workers union, tumbled 2.3%.

The yield on 10-year Treasurys recently traded at 1.556%, according to Tradeweb, little changed from 1.552% on Monday.

U.S. crude oil futures fell 0.2% to $52.63 a barrel, while gold declined less than 0.1% to $1497.20.

Overseas, the Stoxx Europe 600 sank 1.1%. Shares in London Stock Exchange Group tumbled 5.8% after Hong Kong Exchanges & Clearing pulled a $36.6 billion bid for its London rival, a deal that would have united two major trading hubs.

The British pound stumbled on political headwinds, falling 0.7% against the dollar amid increased skepticism a Brexit deal could be reached at the European Union Council of State next week.

In Asia, Japan’s Nikkei climbed 1%, and Korea’s Kospi gained 1.2%. Stocks in Shanghai and Hong Kong rose 0.3% as Chinese markets returned from a holiday.
Regards,
Ted
Bloomberg Evening Briefing:
https://www.bloomberg.com/news/articles/2019-10-08/your-evening-briefing

MarketWatch:
https://www.marketwatch.com/story/dow-futures-drift-lower-as-lower-level-china-us-trade-negotiations-get-under-way-2019-10-08/print

WSJ:
https://www.wsj.com/articles/trade-hopes-lift-asian-shares-but-european-stocks-slip-11570522191

Bloomberg:
https://www.bloomberg.com/news/articles/2019-10-07/asia-stocks-look-mixed-as-china-trade-talks-near-markets-wrap?srnd=premium

IBD:
https://www.investors.com/market-trend/stock-market-today/dow-jones-dives-314-points-china-news-sinks-stock-market/

CNBC:
https://www.cnbc.com/2019/10/08/stock-market-us-china-trade-talks-in-focus-on-wall-street.html

Reuters:
https://uk.reuters.com/article/us-usa-stocks/mounting-trade-concerns-bog-down-wall-street-idUKKBN1WN1AO

U.K:
https://uk.reuters.com/article/uk-britain-stocks/uk-shares-succumb-to-brexit-fears-lse-drops-as-hong-kong-nixes-bid-idUKKBN1WN0NG

Europe:
https://www.reuters.com/article/us-europe-stocks/european-stocks-drop-on-trade-brexit-anxiety-qiagen-tumbles-21-idUSKBN1WN0OC

Asia:
https://www.cnbc.com/2019/10/08/asia-markets-high-level-trade-talks-between-us-and-china-due.html

Bonds:
https://www.cnbc.com/2019/10/08/us-bonds-treasury-yields-higher-as-investors-monitor-us-china-trade-talks.html

Currencies:
https://www.cnbc.com/2019/10/08/forex-markets-us-china-trade-talks-in-focus.html

Oil
https://www.cnbc.com/2019/10/08/oil-markets-industrial-commodities-and-oil-producers-in-focus.html

Gold:
https://www.cnbc.com/2019/10/08/gold-markets-us-china-trade-talks-in-focus.html

Current Futures:
https://finviz.com/futures.ashx