At this point, it is safe to assume the US-China trade war is being directed by M. Night Shyamalan.
In the latest twist to the hostile relationship between Washington and Beijing, the Office of the US Trade Representative announced that, while the new round of tariffs on Chinese imports would go ahead on September 1st, certain products would see punitive measures delayed until December 15th. The list of postponed items includes clothing, some shoes and toys, video games, laptop computers and, perhaps most importantly, cell phones.
This news completely changed the complexion of Tuesday’s previously dour trading and caused the Dow Jones to go a bit doolally after the bell rang on Wall Street. The index touched 26400 as it surged almost 500 points; that means it has just about recovered the abrupt and alarming losses incurred last Monday. Dragging the Dow higher was Apple, which leaped 5% as it expressed relief that its Chinese market is set to be protected a bit longer.
Following in the footsteps of the Dow, the European indices speedily turned their frowns upside down. The DAX and CAC really let rip, climbing 1% and 1.5% respectively having been down as much as half a percent apiece. The FTSE, meanwhile, was disappointingly measured in its response despite big gains for its oil and mining stocks, the UK index instead rising a paltry 20 points.
The latest trade war development overshadowed the day’s data. The morning had been dominated by the UK’s latest Brexit-ignoring wage growth reading, which came in at 3.7% including bonuses, while this afternoon saw a 6-month high core US inflation figure give the Fed a cause for pause ahead of September’s meeting. The good news from both sides of the Atlantic left cable unchanged at $1.208 but allowed the dollar and pound to both climbs 0.3% against the euro.
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