(Photo: Getty images)
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MARKET REVIEW. Wall Street ended the week in the red on Friday, weakened by news that Chinese officials scheduled to visit farms in Montana and Nebraska had finally given up on their trip.
The clues
In Toronto, the S & P / TSX index ended the session up 41 points, or 0.25%, to 16,899 points.
In New York, the S&P 500 lost 14 points, or 0.49%, to 2,992 points.
The Dow Jones fell 159 points, or 0.59%, to 26,935 points.
The Nasdaq lost 65 points, or 0.8%, to 8,117 points.
The context
Over the week as a whole, the Dow Jones fell 1.04%, the Nasdaq 0.72% and the S&P 500 0.50%, with these indices posting weekly losses for the first time in a month.
The confirmation that the Chinese delegation was going to shorten its American stay caused Wall Street to plunge, which was evolving close to balance at the start of the session.
This announcement indicates “that there may be other issues (in the Sino-American trade conflict, editor’s note), because at the same time Donald Trump declared that he did not want a trade agreement before the American presidential election ( in November 2020, Editor’s note) ”, according to Quincy Krosby of Prudential.
“We want a total agreement, a partial agreement does not interest me”, launched Friday the tenant of the White House. “It could go fast, but it wouldn’t be the right deal. We have to do things well, ”he explained, emphasizing the extreme complexity of the matter.
A technical meeting between Chinese and American negotiators, started Thursday, however continued Friday in Washington, confirmed to AFP an official of the services of the representative to the trade (USTR).
The market was also closely following the comments of several members of the US Federal Reserve (Fed) about the overnight rate cut of a quarter of a percentage point announced Wednesday.
If the president of the Boston Fed, who opposed the cut, considered that the American economy “did not need an additional monetary stimulus”, that of the Fed of Saint Louis, favorable to a more substantial decrease, judged that it would have been better “to guard against further falls in expected inflation and against a slowdown in the economy.”
In general, “the market seemed satisfied with a Fed that said it was paying attention to new economic data while scrutinizing the consequences of trade tensions,” summarized Ms. Krosby.
The volatility in the markets was also higher than usual due to the so-called four witches session: like four times a year, several types of futures and options on indices or stocks expired on Friday, forcing investors to divest certain positions.
On the bond market, the 10-year rate on US debt stood at 1.720% around 4.30 p.m., down slightly from the previous day’s close (1.784%).
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