Reuters
- Beijing signaled measures intended to keep its economy afloat as a fresh round of tariffs on US and Chinese goods kicked in this week.
- Chinese and European equities jumped. US futures fell as American markets were closed for the Labor Day holiday.
- The Trump administration slapped tariffs of 15% on $112 billion worth of Chinese goods on Sunday, and China retaliated with the first of two batches of duties targeting $75 billion worth of US goods.
- “The outlook does not look positive for a deal any time soon,” one analyst said.
- View Markets Insider’s homepage for more stories.
Chinese stocks jumped Monday after Beijing signaled measures intended to keep its economy afloat as a fresh round of tariffs on US and Chinese goods kicked in this week.
The State Council’s financial stability and development committee described risks to the economy as manageable and said the state wanted to keep “reasonably ample” liquidity as it faced the brunt of the trade war, according to Bloomberg. The committee was at a conference chaired by Vice Premier Liu He, Bloomberg said.
European equities jumped while US futures fell. Markets were closed in the US for the Labor Day holiday. Stocks in Hong Kong and Japan slid.
The Trump administration slapped tariffs of 15% on $112 billion worth of Chinese goods including footwear, apparel, and Apple Watches on Sunday, and it plans to roll out duties on a further $160 billion in Chinese products such as laptops and cellphones in mid-December.
The Chinese government retaliated by rolling out the first of two batches of tariffs targeting $75 billion worth of US goods. It hiked the price of importing American pork, beef, chicken, and agricultural goods, and it plans to ramp up tariffs on soybeans to 30% in mid-December from 25%.
Trade representatives from the world’s two biggest economies will hold talks this month, President Donald Trump told reporters on Sunday, according to Bloomberg. Yet the US president struck a defiant tone, signaling the yearlong dispute wouldn’t be easily settled. “We can’t allow China to rip us off anymore,” he said.
Analysts aren’t optimistic the two sides can reach a resolution.
“Trade and tariffs continue to gnaw away at investor confidence,” Neil Wilson, the chief market analyst for Markets.com, said in a morning note. “The outlook does not look positive for a deal any time soon.”
Meanwhile, a positive set of Chinese economic data could persuade authorities to hold out for an attractive deal. Chinese manufacturing activity increased in August, according to the latest reading from the Caixin Purchasing Managers’ Index, which rose from 49.9 in July to a five-month high of 50.4.
More government stimulus might be necessary to sustain the revival.
“China’s economy showed signs of a short-term recovery, but downward pressure remains a long-term problem,” Dr. Zhengsheng Zhong, the director of macroeconomic analysis at CEBM Group, said in a statement. “Amid unstable Sino-American relations, China needs to step up countercyclical policies.”
Here’s the market roundup as of 10:20 a.m. in New York:
- European equities were broadly higher, with Britain’s FTSE 100 up 1.2% and Germany’s DAX and the Euro Stoxx 50 up 0.1%.
- Asian indexes were mixed, with China’s Shanghai Composite up 1.3% and Japan’s Nikkei down 0.4%. Hong Kong’s Hang Seng slumped 0.4% after protesters clashed with the police at the territory’s main airport and forced roads to close.
- US stock markets were closed for Labor Day. Futures fell, with those underlying the Dow Jones Industrial Average, S&P 500 and Nasdaq down about 0.3%.
- Oil prices fell with West Texas Intermediate crude down 0.4% at $54.90 a barrel and Brent crude down 0.8% at $58.80.
- Gold inched up 0.3% to $1,534. The haven asset is hovering at its highest level since 2013.