At the end of the week, the major US indices posted a minus. The reason has to do with China again – this time the dispute over the consulate closures is causing unrest.
The recent escalation in the conflict between the USA and China and the domestic political dispute over the extension of Corona aid have also weighed on the US stock exchanges on Friday. Of the Dow Jones index went out of trading with a minus of 0.7 percent to 26,470 points. Of the S&P 500 index closed 0.6 percent lower that Nasdaq composite dropped 0.9 percent. There were 984 (Thursday: 1,342) course winners and 1,989 (1,652) losers on the Nyse. Still closed 84 (71) The downturn was even more massive on Thursday after the surprisingly significant increase in initial jobless claims had fueled economic concerns.
After the US recently ordered the Chinese consulate to be closed in Houston, China ordered the US consulate to close in the southwestern city of Chengdu on Friday. Secretary of State Mike Pompeo called on the Chinese people to change the ruling Communist Party on Thursday, but refrained from calling for an exchange of the regime. And US President Donald Trump said that the Phase I trade agreement is no longer as important to him as it was when it was signed in January.
Ong Zi Yang, macro analyst at FSMOne.com in Singapore, spoke of a "political retaliation" in relation to the consulate closure in Chengdu, which is contrary to the verbal exchange of blows that had previously shaped the conflict. This caused many investors to take profits, especially as the Chinese stock markets in particular had grown strongly since the March slump.
Agreement on further aid package is a long time coming
In the United States, an agreement on another corona aid package has moved further afield. Republicans in the U.S. Senate initially refrained from submitting another trillion dollars in support measures due to ongoing disagreements with the White House. This will make the time for an agreement with the Democrats, which is still necessary, even scarcer. A program expires at the end of July that provides unemployed US citizens with an additional $ 600 in support per week. At the beginning of August, MEPs also say goodbye to the summer break.
Markit's July purchasing managers' indices for services and manufacturing showed improvement, but they were not as strong as expected. Meanwhile, new home sales in June demonstrated the strength of the property market.
Investors Punish Intel for Development Delay
Broke below the individual stocks on the stock exchange Intel by 16 percent after the chipmaker presented business figures on Thursday after the market closed. While the company exceeded expectations in the second quarter, investors were shocked to learn that the development of superfast semiconductors would be delayed. This turns Intel into a competitor AMD falling behind. The AMD share jumped up 16.5 percent.
From the figures published on Friday before the start of trading American Express shows that the credit card company did better in the second quarter than feared. However, the revenue falls short of expectations. The stock fell 1.4 percent.
The numbers of Verizon Communications added. The US mobile operator exceeded market expectations in the second quarter despite the negative effects of the corona pandemic on sales and earnings. The stock rose 1.8 percent
Dollar is weakening again
The increasing tensions between the US and China eased on Foreign exchange market the yuan fall further back. The recent escalation of the dispute could shake the market again due to increasing uncertainty and the threat of volatility, said foreign exchange analyst Hao Zhou from Commerzbank. Because the elections were approaching, Trump had to fight China with hard bandages. Although the trade agreement "means less" to him, he still needs purchases from China to appease voters, particularly in the "swing states". There is little doubt that China's stance will also become tougher, which is why the exchange of blows will continue. The yuan should therefore continue to be under pressure to depreciate.
Meanwhile, the Euro continues to soar against the US motto. It stood in late business at $ 1.1646 after around 1.16 late Thursday. It lost against the yen dollar even more powerful, namely by 0.8 percent.
The Oil prices tended to change little after a volatile business. On the one hand, the tightened tone weighed between China and the United States. On the other hand, the dollar supported, which was somewhat weaker against many other currencies. The barrel of US crude oil WTI gained 0.4 percent to $ 41.21. Brent oil remained unchanged at $ 43.31.
gold was asked again against the background of political and economic uncertainty. The troy ounce price rose 0.8 percent to $ 1,902, a new nine-year high. On the other hand, hardly anything moved on the bond market after the recent increase. The ten-year return remained at 0.58 percent.
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