New York (New York, USA) – June 14th 2019 4:57pm
Wall Street ended lower on Friday as worries about the Chinese economy and geopolitical tensions in the Middle East took precedence over more favorable US economic statistics. According to the final results at closing, its flagship index, the Dow Jones Industrial Average, fell 0.07% to 26,089.61 points. The Nasdaq index, with strong technological color, lost 0.52%, to 7,796.66 points.The broad S & P 500 index dropped 0.16% to 2,886.98 points. Industrial output dried up in May year-on-year in China, its lowest level in 17 years, as the trade war escalated with Washington. Retail sales rebounded in May.”Consumption has remained stable despite escalating trade conflict, but growth in the manufacturing sector has suffered a new setback,” said Ken Berman of Gorilla Trade. More broadly, the Chinese economic slowdown at work worries for several months the investors of the whole world, Beijing being considered as one of the main engines of the growth on the planet.
– Tensions –
Listed on Wall Street, Chinese groups Alibaba, JD.com and Baidu suffered and lost respectively 1.39%, 1.78% and 0.82%. At the same time, concern over the aftermath of rising tensions in the Middle East after Thursday’s attack on two ships, amid threats between the United States and Iran.
Also a source of distrust, consumer confidence in the United States eroded in early June, suffering the effects of the trade war and the slowdown in job growth.
This environment has encouraged market participants to shy away from risky assets, such as equities, to favor more secure assets such as the dollar. In this very uncertain situation has been added the plunge of the sector of semiconductor manufacturers.
Broadcom, which significantly lowered its sales forecast due to US sanctions against Huawei and more generally trade tensions, plunged by 5.57%. In its wake, Advanced Micro Devices fell by 3.28%, Nvidia by 2.44%, Micron Technology by 2.16% and Qualcomm by 1.73%.
This relatively negative news has not allowed market players to applaud US economic statistics on industrial production and retail sales.
However, they have “alleviated some of the slowdown threats we have seen in recent years in many US indicators,” said Peter Cardillo of Spartan Capital. These data have been scrutinized for weeks as they give an indication of the inclination or otherwise of the US Central Bank (Fed) to want to support the activity by potentially lowering its interest rates. The meeting of 18 and 19 June will be scrutinized with great attention in this light, as the institution will have to give indications on its future potential movements on rates. Among other values of the day, the American company Chewy, specializing in the sale of online products for animals, such as dog kibble, took the first steps with fanfare on Wall Street Friday, taking 59%. On the bond market, the interest rate on the ten-year debt fell to 2.083% against 2.095% the day before the closing.