Bloomberg
“Trade Tensions Rattle U.S. Equities; Crude Gains: Markets Wrap.”
U.S. stocks slid to a three-week lows as President Donald Trump’s threats of more trade protectionism against major partners were met with Chinese and European vows of retaliation, rattling global equities and sparking demand for the safety of bonds.
The S&P 500 Index fell to the lowest since May, with technology shares leading declines on reports the U.S. Treasury Department plans to release fresh rules on Chinese investment in technology companies. The Dow Jones Industrial Average sank for the ninth time in 10 sessions with Boeing Co. and Caterpillar Inc. again pacing losses. China and Europe warned the escalating trade war could trigger a global recession.
The equity selling spread from Asia, where equities in Shanghai and Hong Kong declined despite China’s central bank freeing up liquidity in the banking system. European shares also tumbled, with the Stoxx 600 Index down 1.5 percent. Political concerns hit Italian bonds and stocks after the nationalist League party won municipal elections. Emerging-market equities slid. U.S. crude pushed toward $69 a barrel. After an early surge, Turkey’s lira swung between gains and losses as traders digested Recep Tayyip Erdogan election victory.
After months of rhetoric and threats, the trade fight seems to be coming to a head, with Europe imposing tariffs on $3.3 billion of American products Friday in response to U.S. barriers on imports of aluminum and steel. That triggered threats of further tariffs on European cars from Trump. The proposed limits on Chinese technology investment strain already tense relations between the world’s two largest economies.
The rising tensions have weighed on stocks ahead of the second-quarter earnings season that so far has seen estimates keep rising. Daimler AG dented that notion last week, warning that tariffs will lower its profits. Germany’s DAX Index was among the worst performers of the region’s stock gauges as data showed business sentiment slipped. Automakers were the big losers after more tariff threats from President Donald Trump at the end of last week.
Reuters
“U.S. says still working to reunite 2,053 children with families.”
The U.S. government still has 2,053 children in its custody who were separated from their parents under President Donald Trump’s “zero tolerance” immigration policy and officials said there was a “well coordinated” process for reuniting families. The Department of Homeland Security issued a fact sheet late on Saturday in the face of criticism from lawyers for parents and children who have said they have seen little evidence of an organized system.
A total of 522 children in the custody of U.S. border officials have already been reunited with parents, according to the fact sheet, which was published three days after Trump ended his policy of separating families on the U.S.-Mexico border.
On Sunday, Trump renewed his hardline on immigration calling for people who enter the United States illegally to be sent back to where they came from immediately without any judicial process.
An administration official said on Sunday 522 children were able to be reunited because their parents came back from court proceedings quickly enough that the children had not yet been transferred to the custody of the Department of Health and Human Services, where the more than 2,000 children who remain separated from their parents are now.
The new details came after more than two months of confusion how detained migrant parents, who are shuttled from facility to facility run by different government agencies, would ever reunite with their children, who are sent to shelters and foster homes scattered across the country. Deportation proceedings could take months to complete, and the fact sheet did not say whether parents and children would be reunited in the intervening time.
BBC News
“Turkey election: Erdogan win ushers in new presidential era.”
Turkish President Recep Tayyip Erdogan is taking on extensive new executive powers following his outright election victory in Sunday’s poll. Parliament has been weakened and the post of prime minister abolished, as measures approved in a controversial referendum last year take effect. Defeated opposition candidate Muharrem Ince said Turkey was now entering a dangerous period of «one-man rule». Mr Erdogan polled nearly 53% in the most fiercely fought election in years.
Mr Ince received just 31%, despite a lively campaign attracting huge crowds. Mr Erdogan, 64, has presided over a strong economy and built up a solid support base.
But he has also polarised opinion, cracking down on opponents and putting some 160,000 people in jail.
Congratulations have come in from around the world, though some Western leaders have been slow to react. Russian President Vladimir Putin talked of Mr Erdogan’s «great political authority and mass support». In his victory speech on Monday morning, Mr Erdogan vowed to bring in the new presidential system «rapidly».
Bloomberg
“Harley-Davidson to move some production out of U.S. to avoid EU tariffs.”
Harley-Davidson Inc (HOG.N) said on Monday it would move production of motorcycles shipped to the European Union from the United States to its international facilities and forecast the trading bloc’s retaliatory tariffs would cost the company $90 million to $100 million a year.
The shift in production is an unintended consequence of U.S. President Donald Trump’s administration imposing tariffs on European steel and aluminum early this month, a move designed to protect U.S. jobs.
In response to the U.S. tariffs, the European Union began charging import duties of 25 percent on a range of U.S. products including big motorcycles like Harley’s on June 22.
In a regulatory filing bit.ly/2tA1ru0 on Monday, the Milwaukee, Wisconsin-based company said the retaliatory duties would result in an incremental cost of about $2,200 per average motorcycle exported from the United States to the European Union, but it would not raise retail or wholesale prices for its dealers to cover the costs of the tariffs.
Struggling to overcome a slump in U.S. demand, Harley has been aiming to boost sales of its iconic motorcycles overseas to 50 percent of total annual volume from about 43 percent currently. In January, the company announced the closure of a plant in Kansas City, Missouri as part of a consolidation plan after its motorcycle shipments fell to their lowest level in six years.
In 2017, Harley sold nearly 40,000 new motorcycles in Europe which accounted for 14 percent of the company’s sales last year. The revenues from EU countries were second only to the United States.