U.S. stocks dive as trade jitters return

Irving Hamilton
December 7, 2018

On the futures markets, the ASX futures are pointing to a 75 points fall.

Stocks fell sharply on Wall Street Tuesday as traders anxious that the US and China made less progress than originally thought on defusing their dispute over trade. The Nasdaq Composite fell by 283 points or 3.8% while the S&P 500 Index fell by 90.3 points or 3.2%. Apple (NASDAQ: AAPL) fell by 4.4%, Netflix (NASDAQ: NFLX) fell by 5.1%, Alphabet (NASDAQ: GOOG) fell by 4.8%, while Facebook saw the smallest loss of 2.2%.

On Wall Street, investors' confidence in the U.S. The falls came on the back of doubts of a trade deal being reached between the U.S. and China.

The Dow Jones Industrial Average fell 799.36 points (3.10 per cent) to 25,027.07. Tech companies, banks and exporters including Boeing and Caterpillar all declined. Media appearances Monday with Trump administration officials shed little light on the specifics of how Sino-American trade negotiations will progress.

"The market is fairly confused with Fed communication, and then of course you've got that perhaps the trade wars have already done their damage, that's why we are seeing a flatter curve".

Trump announced via a weekend tweet that China would "start purchasing agricultural product immediately", and that "China has agreed to reduce and remove tariffs on cars coming into China from the U.S".

Moody's Investors Service suggested in a report Tuesday that despite the latest U.S.

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"Maybe we're not going to get as dovish a Fed as some think", said Joseph LaVorgna, chief economist, Americas at Natixis in NY. During a briefing with reporters, Williams said that, given his outlook for strong economic growth, he continues to "expect that further gradual increases in interest rates will best sponsor a sustained economic expansion".

Yields on two-year and three-year bonds held above the five-year yield for a second day, while the benchmark 10-year yield hit its lowest since mid-September as demand for longer-dated Treasuries rose on bets of an approaching economic slowdown. Eastern Time. The Dow plunged 730 points, or 2.8 percent, to 25,095, more than erasing its 488-point gain over the previous two trading days. The market gained Monday after the Trump administration said USA and China agreed to a temporary cease-fire in a trade dispute.

"Today's move feels like the market is a scorned lover. Concerns were also compounded by increasing news narrative on inverted curves and risks of a recession".

The KBW Bank index slid 4.90% with Bank of America Corp and Citigroup Inc dropping more than 5 % each. Benchmark U.S. crude gained 0.6 percent to settle at $53.25 per barrel in NY. Brent crude, used to price global oils, lost 63 cents to $61.45 per barrel in London.

The energy sector dropped 1.3 per cent as US crude prices pared gains.

The dollar weakened to 112.82 yen from 113.69 yen late Monday. The euro declined to $1.1330 from $1.1343.

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