Equities
Global stocks were mixed near the end of a brutal week as China boosted tariffs against U.S. goods to 125 per cent, escalating a trade war that could disrupt global trade and trigger an economic downturn.
Wall Street’s main indexes opened lower as markets assessed the latest escalation in the trade war.
The Dow Jones Industrial Average fell 0.25 per cent to 39,493.42, the S&P 500 dropped 0.24 per cent to 5,255.56, and the Nasdaq Composite slid 0.18 per cent to 16,358.532 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.5 per cent higher at 23,127.89 points, led by gains in materials stock.
On Wall Street, markets are watching earnings from Progressive Corp., Bank of New York Mellon Corp., BlackRock Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.
“Broadly the direction remains pretty clear – big jumps are as disquieting as big selloffs; a 3-4-per-cent rebound for an index is hardly sustainable when investors remain worried about the trade war uncertainties, the potential impact on the economic growth, on inflation and on jobs,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
Riders on the storm: World market themes for the week ahead
Overseas, the pan-European STOXX 600 was down 0.25 per cent in morning trading. Britain’s FTSE 100 rose 0.35 per cent, Germany’s DAX fell 1.16 per cent and France’s CAC 40 gave back 0.47 per cent.
In Asia, Japan’s Nikkei closed 2.96 per cent lower, while Hong Kong’s Hang Seng climbed 1.13 per cent.
Commodities
Oil prices were stable but on track for their second weekly loss in a row against a backdrop of investor concern over the burgeoning trade war between the United States and China.
Brent crude futures were down 0.6 per cent at US$62.94 a barrel, while West Texas Intermediate (WTI) crude futures slid 0.6 per cent to US$59.71.
Brent and WTI are poised to register weekly declines of almost 3 per cent and 2.5 per cent respectively, having both lost about 11 per cent last week.
BMI analysts “expect prices will remain under pressure as investors assess ongoing trade negotiations and rising tensions between Washington and Beijing.”
In other commodities, spot gold jumped 1.4 per cent to US$3,217.15 an ounce after hitting a record high of US$3,237.56 earlier in the session. Bullion is up nearly 6 per cent so far this week. U.S. gold futures climbed 1.8 per cent to US$3,234.90.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.47 US cents to 72.25 US cents in early trading. The Canadian dollar was up about 3.7 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, dropped 1.42 per cent to 99.44.
The euro rose 1.82 per cent to US$1.1405. The British pound advanced 1.2 per cent to US$1.3126.
In bonds, the yield on the U.S. 10-year note was last up at 4.440 per cent.
Corporate news
Morgan Stanley beat first-quarter profit estimates on strength in equity trading and wealth management, sending its shares up 1.9 per cent before the bell.
JPMorgan Chase’s first-quarter profit rose 9 per cent, topping estimates, driven by record equities trading and higher fees from debt underwriting and merger advisory.
BlackRock has posted a drop in first-quarter profit as the world’s largest asset manager took a hit from weakness in equity markets following uncertainty regarding U.S. tariffs.
Wells Fargo’s profit rose 6 per cent in the first quarter. driven by robust performance in its wealth management business.
Bank of New York Mellon has reported a 17-per-cent jump in first-quarter profit as it managed higher assets under custody that boosted its fee income.
Economic news
Germany CPI
UK GDP, trade deficit, industrial production and manufacturing production
(8:30 a.m. ET) U.S. PPI for March, which unexpectedly fell amid a sharp decline in the cost of energy products, but tariffs on imports are expected to drive inflation higher in the coming months. The producer price index for final demand dropped 0.4 per cent last month, compared with a consensus gain of 0.2 per cent.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for April (preliminary reading).
With Reuters and The Canadian Press