Wall Street continues to walk a very fine line, after two months of intense volatility. The enthusiasm that followed the alleged truce between the united States and China in the face of commercial evaporated suddenly when registering the S&P 500, a sharp decline that exceeded the 3% and the Nasdaq was nearly 4%. Doubts about the direction the discussions were joined by the fear of a slowdown in the economy.
The Dow Jones lost 800 points, a 3.1 per cent at the close and struggled again to maintain the level of 25,000 points, which finishes off. The yield curve on the Treasury bonds at two and ten years, meanwhile, continued approaching. If they reversed it is a trend that in the past was associated with the proximity of a recession, which would anticipate a correction in the stock market.
The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina. Bob Lighthizer will be working closely with Steve Mnuchin, Larry Kudlow, Wilbur Ross and Peter Navarro…..
— Donald J. Trump (@realDonaldTrump) December 4, 2018
The trigger of the turmoil this Tuesday was a series of messages from Donald Trump on his Twitter account about the pact with Xi Jinping at the G20 summit. Also not helped by the comments of John Bolton, the hawk of the National Security, on the intellectual property. The market, meanwhile, is to rebalance in anticipation of a scenario with a growth Bets10 more modest in 2019.
….I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN
— Donald J. Trump (@realDonaldTrump) December 4, 2018
time will tell after three months of truce agreed there is some type of progress that may result in an agreement. The caution made of ballast in the values of multinational manufacturers as Caterpillar and Boeing for the combined effect of the uncertainty in the battle of trade and the economy. The doubts were propagated also by the technological, such as Amazon, Apple, Microsoft and Google.
The markets will be closed this Wednesday in the united STATES in a sign of mourning for the death of the former president George H. W. Bush. The attention of investors is directed to the fact of employment that is published Friday. The indicator is the key to the Federal Reserve. It is expected that the central bank of u.s. re-upload types within two weeks, which will be the third in 2018. They are currently between 2% and 2,25%.
In parallel, executives of the major manufacturers of cars passed this Tuesday by the White House to talk about the investments we are making in the united STATES and the alliances they are forming with brands domestic to best manage the ability. But although the threat of tariffs seems relaxing, it is clear that these investments are dependent upon market conditions.
