It’s looking like stocks won’t see a fifth up session in a row, thanks to the new round of U.S. tariffs targeting China.
A global selloff is underway for equities, with Shanghai’s benchmark SHCOMP, -1.76% closing 1.8% lower, after the Trump administration late yesterday unveiled 10% tariffs on a further $200 billion in Chinese goods. Beijing has promised retaliation and blasted the White House for displaying a “loss of reason.”
What to make of it all?
The U.S.-China fight isn’t a trade war yet, and investors looking for red flags should track CEOs and shoppers, according Richard Turnill, BlackRock’s global chief investment strategist. He provides our call of the day.
“At this stage, if you look at the numbers — so an additional $200 billion of tariffs, 10% on those — that adds up to about 0.1% of U.S. GDP,” Turnill said in a Bloomberg Radio interview.
“As yet, the measures we’ve seen implemented don’t constitute a trade war and don’t have a material impact on growth.”
So when might he start to get rattled?
“What investors need to focus on is at what point do these continued trade tensions start to impact corporate confidence and consumer confidence in the economy?” Turnill said.
“We’ve seen some signs of that, with some CEOs coming out and talking about deferring investment — warning the administration against further tensions. Those signals, I think, would be more worrying and indicate this is something more than simple rising trade tensions, which should be bought into.”
The strategist said BlackRock, the world’s largest asset manager, is bullish on U.S. stocks, but recommends taking some profits on European and Japanese equities and being selective overall, given that the pattern of tit-for-tat tariffs is “showing no real sign of coming to an end.”
Go here to listen to the full audio clip featuring Turnill. He also has given his take on markets via the chart shown below that features smiley and frowny faces.
Read more: Trump pushes U.S. closer to once-unthinkable trade war
And see: How will investors know if there’s a full-blown trade war?
The trade tensions get a frowny face.
Key market gauges
Futures for the Dow YMU8, -0.73% , S&P 500 ESU8, -0.56% and Nasdaq-100 NQU8, -0.66% are falling, after the Dow DJIA, +0.58% , S&P SPX, +0.35% and Nasdaq Composite COMP, +0.04% all scored their fourth up session in a row yesterday.
Europe SXXP, -1.02% and Asia have been seas of red. Oil CLQ8, -0.88% and gold GCQ8, -0.44% are lower, as the dollar index DXY, +0.21% rises. Bitcoin BTCUSD, -0.42% is changing hands around the $6,400 mark.
See the Market Snapshot column for the latest action.
“Germany, as far as I’m concerned, is captive of Russia because it is getting so much of its energy from Russia.” —President Donald Trump talked tough at a breakfast today in Belgium as a two-day NATO summit began.
A German official offered a dismissive response to the president’s criticism. Meanwhile, the U.S. embassy in London is telling Americans in that city to “keep a low profile” as protests are planned when Trump visits the U.K. later this week.
Read: Trump heads to NATO gathering, Putin summit with allies on edge
And see: President says ‘up to the people’ whether Theresa May should be replaced
The latest U.S. salvo in the trade fight with China has whacked prices for a range of commodities.
Soybean futures SX8, -1.52% have erased a recent gain, as shown in the chart above. China can increase its soybean imports from other countries to reduce its reliance on U.S. producers, a key Chinese official reportedly said today.
Don’t miss: Trade dispute opens ‘window of opportunity’ for soybean investors
Republican Sen. Orrin Hatch has criticized the new round of tariffs as “reckless” and “not a targeted approach,” while storied investor Mark Mobius says Trump is “not going to give in” and “we are in uncharted waters.”
Go here for the lengthy list of Chinese goods that the U.S. government has targeted with its latest move.
See: Stock-market bulls look for earnings to trump trade-war fears
Pfizer PFE, +0.73% plans to reorganize into three units, and the drugmaker says it will delay some price hikes after talking with Trump.
Details are out for that higher Fox FOX, +0.53% bid for Sky SKY, +0.90% that had been expected, and Fastenal FAST, -0.18% posted an earnings beat.
In other economic news, a reading on producer prices is due before the opening bell, wholesale inventories come after the open, and New York Fed President John Williams is due to speak after the close.
Check out: MarketWatch’s Economic Calendar
The Bank of Canada is expected to raise rates, but analysts say it won’t help the loonie USDCAD, +0.1754% much.
Uber HR executive Liane Hornsey reportedly has resigned following allegations that she dismissed complaints about racial discrimination.
It’s 7/11 Day again and that means free Slurpees.
Here’s why people should stop live-tweeting strangers flirting.
Seth Klarman’s coveted “Margin of Safety” book was briefly on sale for $10.
An irate sell-side analyst appears to have chosen a memorable way to resign.
HHS boss says his agency is showing “generosity” to detained migrant kids.
Pogba salutes the rescued Thai soccer team after France’s World Cup win…
…while England fans get ready by celebrating #WaistcoatWednesday:
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