Wall Street Declines As Trade War Fears Deepens

Concerns by markets of an escalation on Trade War saw declines in trade on Wall Street on Friday shrugging off upbeat earnings data led by Microsoft.

Treasuries fell as the dollar weakened while stocks closed lower following President Trump’s fresh threats to impose tariffs on $500 billion worth of Chinese imports.

• The Dow Jones Industrial Average fell 0.03 percent or 6.38 points to 25,058.12
• S&P 500 Index fell 0.09 percent or 2.66 points to 2,801.83
• Nasdaq Composite Index fell 0.07 percent or 5.10 points to 7,820.20

Microsoft Shares Record High

The biggest supporter of the S&P 500 and the Nasdaq was the record high of 1.8 percent increase in shares of Microsoft Corp. of earnings for the second quarter.

Chief Investment Strategist at SlateStone Wealth LLC in New York, Robert Pavlik reportedly said that on the Street there is a divided line where one side thinks that there will be a global recession, regarding the trade dispute. While the other side is of the belief that Trump is waiting for the other side to negotiate.

Yield on 10 year Treasuries gained the most since May 30, rising six basis points to 2.89 percent.

Trump Critises Fed

Over the past two days President Trump has been criticising Federal Reserve Chairman Jerome Powell, tweeting that by raising interest rates it would undercut and diminish his efforts of any U.S. trade advantage.

Potomac River Capital LLC in Washington, founder and chief investment officer, Mark Spindel told reporters that if things do not go according to plan, Trump is setting him up, for someone to blame.

The Fed has been gradually cutting Treasury and mortgage backed bonds and since Trump became President in January 2017 has raised interest rates five times. They have forecast a further two more increases of quarter-point for 2018. U.S. interest rates are now at 2%.

Growth in S&P 500 companies has grown 22.0 percent in the second quarter compared to July 1, figure of 20.7 percent. 83.9 percent of the 87 companies that have posted results have beaten estimates.

There were 21 new 52 week highs posted on the S&P 500 and two new lows. While on the Nasdaq Composite there were new highs of 109 and 38 new lows.

On U.S. exchanges there was 6.00 billion shares in volume.

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