Dow Jones closes in positive territory: dispute between the USA and China worries investors

Dow Jones closes in positive territory
Dispute between the US and China worries investors

September 7, 2023, 10:09 p.m

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China risks fueling the trade war with the United States by extending the iPhone ban. Not only Apple stocks are suffering from the measure, but the entire index of the Nasdaq technology exchange. Interest rate concerns are also weighing on the solar industry.

Investors on Wall Street have withdrawn due to fears that interest rates will remain high for a longer period of time and a renewed trade dispute between the USA and China. In particular, technology stocks that were considered riskier had to give up, especially the Apple Group, which was faced with a ban on its iPhones in China. The technology stock market index Nasdaq rushed down 1.1 percent to 13,748.83 points. The broader one S&P500 lost 0.32 percent to 4451.14 points, during the Dow Jones Index 0.17 percent higher at 34,500.73 points.

Concerned about expanding iPhone bans in China, more and more investors are dumping stocks Apple from their depots. The shares fell by 2.92 after having already lost 3.6 percent on Wednesday. Apple suppliers and companies with large China business such as Broadcom or Texas Instruments lost between 1.75 and 1.99 percent. According to insiders, the country partially bans civil servants and other employees of state-supported employers from using iPhones at work. China is re-heating the technology and trade war with the USA, said portfolio manager Thomas Altmann from asset manager QC Partners.

Continuing concerns about inflation and interest rates also weighed on the mood after the number of weekly initial applications for unemployment assistance was lower than expected at 216,000. This, according to traders, supports fears that interest rates could remain high for longer than expected. The US Federal Reserve wants to cool down the hot labor market with its tight interest rates, but without strangling the economy.

Falling prices on the raw material markets

Investors are also concerned about the weakening economy in China. So far, the leadership in Beijing has not yet managed to get its own economy back on track after the end of the strict Corona restrictions. Exports fell in August for the fourth month in a row. Accordingly, concerns about demand depressed prices on the raw materials markets. China, the world’s largest copper consumer, bought five percent less of the metal in August than in the same period last year. “We are cautious about the near-term outlook for copper. China remains the key source of caution,” said ING analyst Ewa Manthey. “Downside risks remain through the end of the year due to the uncertain outlook for China.”

On the stock market, stocks from the solar industry, which is particularly dependent on interest rates, lost value. The module manufacturers First Solar, SunPower and Canadian Solar slipped between 0.84 and 4.74 percent. The solar system manufacturers Enphase Energy and Solar Edge Technologies lost 0.65 and 2.32 percent respectively. Higher interest rates extend the estimated time it will take to break even on the initial solar installation investment.

The title of the insulin pump manufacturer island fell more than eight percent. The group’s boss, James Hollingshead, told an industry conference that the new generation of diabetes drugs (GLP-1) could extend the time until a diabetes patient becomes dependent on insulin. “What we could see is that GLP-1 influences the time to progression on insulin therapy,” Hollingshead said. Insulet manufactures and sells insulin delivery devices under the Omnipod brand that save people with insulin-dependent diabetes from the need for multiple daily injections.