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NEW YORK (Dow Jones) – Wall Street is showing slight haircuts at the end of the week after a stock market crash in Hong Kong. The main reason for reluctance is a worsening of the simmering tensions between Washington and China. The reason is the new “security law” for Hong Kong, which the National People’s Congress in Beijing has put to the vote. In view of the mass protests by the Hong Kong democracy movement last year, the law is intended to tighten the “enforcement mechanisms”. The Hong Kong stock exchange then suffered drastic losses as a result of fears that the protests would flare up again, and the law also threatened the special administrative zone’s status as a leading global financial center.
The Dow Jones index loses 0.5 percent to 24,364 points around noon (New York time), the S&P 500 drops 0.2 percent, while the Nasdaq indices show little change.
US president Donald Trump If China has immediately threatened to react, Beijing should try to gain greater control over the former British colony. If China moves ahead with the measures, he will tackle the issue consistently, Trump said. US senators have already announced plans to sanction Chinese officials and institutions that enforce the security law.
The market has somehow gotten used to the corona pandemic and terrible economic indicators, said David Madden, market analyst at CMC Markets. The potential impact of a trade war may prove to be too much for investors.
The US president had recently tightened his rhetoric against the background of the corona pandemic, which originated in China, and repeatedly accused Beijing of misinformation. On the markets, this had led to fears that the US could impose trade sanctions on China.
Important economic data was not released before the long weekend in the United States. There is no trading on Monday because of “Memorial Day”. Trading on the US bond market was already shortened this Friday and ended at 8 p.m. CEST.
Safe ports with increased uncertainty are in demand
The gold price is increasing given the uncertainties surrounding Hong Kong. The price for the troy ounce rises 0.4 percent to $ 1,733. Bonds are also in somewhat greater demand among investors. The yield on ten-year US government bonds fell 2.4 basis points to 0.65 percent as prices rose.
The dollar is appearing to be firmer on the currency market as a supposedly safe currency haven. The dollar index gains 0.4 percent. The euro slips just below the $ 1.09 mark against 1.0947 on Thursday night. On the free tradable offshore yuan, the greenback was around 7.1490 yuan after it was still at 7.1284 the previous evening.
Meanwhile, oil prices are falling more sharply, weighed down by concerns that a flare-up of the US-China trade dispute could reduce oil demand. The price of the US variety WTI drops 3.5 percent to $ 32.72. The European reference variety Brent loses 3.9 percent per barrel to $ 34.67.
Nvidia firmer by good numbers – Hewlett Packard buckle
Nvidia grew by 2.1 percent. The US graphics card specialist is among the winners during the Covid 19 pandemic and has seen its sales and profits increase significantly in its first quarter. On the one hand, society benefited from the fact that many people now work from home, on the other hand, the use of video games grew. Nvidia was optimistic for the current quarter and expects further sales growth.
IBM, however, gave 0.9 percent. The IT group is cutting jobs for the first time under the leadership of its new boss Arvind Krishna. With the Job cuts, the exact number of which has not been given, the company claims to try to be more flexible and to stimulate its growth again. IBM is suffering from the pandemic.
Hewlett Packard Enterprise shares plunge 12.5 percent. As a result of a massive drop in sales in the second quarter, the company posted a high loss. The company has now decided on a three-year plan to save $ 1 billion in costs.
The figures from Alibaba are also recorded with disappointment; the share falls by 4.5 percent on the Nasdaq. The Chinese e-commerce company increased sales by 22 percent in the fourth quarter, but profits slumped by 88 percent. Alibaba reported that because of the initial restrictions, more food was bought online, but less clothing and decorative cosmetics.
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INDEX last +/-% absolute +/-% YTD
DJIA 24,364.12 -0.45 -110.00 -14.63
S & P-500 2,942.71 -0.20 -5.80 -8.92
Nasdaq Comp. 9,281.86 -0.03 -3.03 3.45
Nasdaq-100 9,374.99 -0.03 -3.00 7.35
US bonds
Maturity Yield Bp to VT Yield VT +/- Bp YTD
2 years 0.15 0.0 0.15 -104.9
5 years 0.32 -1.0 0.33 -160.2
7 years 0.49 -2.3 0.52 -175.3
10 years 0.65 -2.4 0.67 -179.7
30 years 1.36 -2.5 1.38 -170.8
CURRENCIES last +/-% Fri, 9: 02 Thu, 17:20% YTD
EUR / USD 1.0892 -0.51% 1.0926 1.0947 -2.9%
EUR / JPY 117.11 -0.63% 117.31 117.92 -3.9%
EUR / CHF 1.0590 -0.34% 1.0600 1.0618 -2.5%
EUR / GBP 0.8947 -0.09% 0.8952 0.8960 + 5.7%
USD / JPY 107.51 -0.15% 107.38 107.71 -1.2%
GBP / USD 1.2174 -0.41% 1.2202 1.2218 -8.1%
USD / CNH (offshore) 7.1487 + 0.18% 7.1448 7.1284 + 2.6%
Bitcoin
BTC / USD 9,199.26 + 1.15% 9,097.26 9,114.26 + 27.6%
ROHOEL last VT-Settl. +/-% +/- USD% YTD
WTI / Nymex 32.72 33.92 -3.5% -1.20 -44.4%
Brent / ICE 34.67 36.06 -3.9% -1.39 -45.4%
METALLE last day before +/-% +/- USD% YTD
Gold (spot) 1,731.14 1,725.70 + 0.3% +5.44 + 14.1%
Silver (spot) 17.08 17.00 + 0.5% +0.08 -4.3%
Platinum (spot) 835.90 827.75 + 1.0% +8.15 -13.4%
Copper future 2.39 2.43 -1.8% -0.04 -15.1%
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DJG / DJN / cln / err
(END) Dow Jones Newswires
May 22, 2020 12:20 ET (16:20 GMT)
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