“U.S. Stocks Rise, Asia Falls as Tariffs on the Way: Markets Wrap.”
U.S. stocks surged and Asian shares slid to a nine-month low as traders prepare for the implementation of fresh trade restrictions between America and China. European automakers drove the continent’s equity markets higher on hopes of a trans-Atlantic tariff agreement.
All major U.S. equity benchmarks were higher, with the Nasdaq indexes leading the market on strength in chipmakers. The dollar fell with Treasuries as jobless data disappointed. The yuan held steady. Commodities were down slightly, as pressure hit those heavily exposed to international trade, with iron ore futures in Singapore hitting a seven month low.
The trade conflict is poised to enter a new phase on Friday, with the imposition of fresh tariffs between the world’s two biggest economies. China said that it won’t be the first to act, and will hold off on enforcement until the U.S. does. Investors are also preparing for more end-of-week action in the shape of the latest Federal Reserve minutes and American jobs data.
The euro strengthened and sovereign bonds fell as investors repriced the trajectory of ECB rate increases and after data showed German factory orders surged in May. The pound climbed on hawkish comments from Bank of England Governor Mark Carney.
Elsewhere, West Texas Intermediate crude advanced. Emerging-market shares slipped for the eighth time in nine days, and developing-nation currencies held steady.
“Trump to OPEC: ‘Reduce pricing now!’.”
U.S. President Donald Trump again accused the Organization of the Petroleum Exporting Countries of driving gasoline prices higher on Wednesday and urged the oil producer group to do more.
The Republican president has lashed out at OPEC in recent weeks. Rising gasoline prices could create a political headache for Trump before November mid-term congressional elections by offsetting Republican claims that his tax cuts and rollbacks of federal regulations have helped boost the U.S. economy.
In a tweet on Saturday, Trump said Saudi Arabia had agreed to increase oil output by up to 2 million barrels, an assertion that the White House rowed back on in a subsequent statement.
The leader of Saudi Arabia, OPEC’s biggest member, has assured Trump that the kingdom can raise oil production if needed and that the country has 2 million barrels per day of spare capacity that could be deployed to help cool oil prices to compensate for falling output in Venezuela and Iran.
Trump has been complaining about OPEC at the same time that Washington is piling pressure on its European allies to stop buying Iranian oil.
Iranian OPEC Governor Hossein Kazempour Ardebili said on Thursday that Trump had raised oil prices through his tweets. “Your tweets have increased the prices by at least $10. Please stop this method,” the Iranian oil ministry’s news agency, SHANA, quoted Kazempour as saying
Kazempour said Trump was trying to intensify tensions between Iran and Saudi Arabia. He also called on the United States to join world powers in a meeting with Iran in Vienna on Friday.
Foreign ministers from the five remaining signatories of a nuclear deal between Tehran and world powers will meet Iranian officials in the Austrian capital to discuss how to keep the accord alive after the U.S. withdrawal from the pact. Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile U.S. action.
“Boeing strikes aircraft deal with Brazil’s Embraer.”
Boeing has agreed a deal that will give it control of Embraer’s commercial jet business. The proposed joint venture will give the US aerospace giant a significant stake in the market for smaller passenger planes.
Boeing has been courting Brazil’s Embraer for some time. The need for a deal has recently become more pressing since its European rival, Airbus, took control of Bombardier’s regional jet programme.
Its deal with the Canadian company had threatened to give Airbus a significant advantage in the global marketplace. The agreement, which values Embraer’s commercial aircraft operations at $4.75bn, will restore parity between Boeing and Airbus.
Under the proposed deal, Embraer’s commercial business will be placed in a new joint venture, with Boeing holding an 80% stake worth $3.8bn (£2.9bn).
Embraer is a Brazilian industrial champion and a major manufacturer of military systems.
Dennis Muilenburg, Boeing chief executive, said: «By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies’ customers, employees and shareholders – and for Brazil and the US.» Boeing said the deal is expected to close by the end of 2019 pending the necessary approvals..
“Companies in U.S. Added Fewer Workers Than Forecast in June.”
Companies in the U.S. added fewer workers in June than forecast as a tight and still-solid labor market led to a slower pace of hiring, according to data released Thursday from the ADP Research Institute in Roseland, New Jersey.
The results, coming ahead of the government’s monthly jobs report on Friday, showed broad gains across industries including manufacturing, construction, health care and trade and transportation.
Steady gains in employment are helping underpin consumer spending and lift economic growth even as uncertainty surrounding import tariffs poses a risk to the outlook for businesses. At the same time, wage growth is yet to develop a sustained acceleration even as employers frequently cite shortages of skilled workers.
A separate report showed U.S. filings for unemployment benefits rose to a six-week high at the end of June, while remaining consistent with a tight labor market and below year-ago levels. Jobless claims increased by 3,000 to 231,000 in the week ended June 30, according to the Labor Department. That compared with the median estimate of analysts for 225,000.
“Business’ number one problem is finding qualified workers,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moody’s produces the figures with ADP.“At the current pace of job growth, if sustained, this problem is set to get much worse. These labor shortages will only intensify across all industries and company sizes.”