Fri, 07 Aug 2020

U.S. stocks tumble as Trump goes on tirade

Lola Evans
24 Aug 2019, 09:09 GMT+10

NEW YORK, New York - U.S. stocks got smashed on Friday after President Donald Trump engaged in a tirade against China, followed by a tearing of strips off Federal Reserve Chairman Jerome Powell.

China announced it was imposing tariffs on a modest $75 billion worth of U.S. goods, in retaliation for Mr Trump's imposition of tariffs on $300 billion worth of Chinese goods, although $150 million of these tariffs have been deferred.

The increasingly erratic U.S. president extraordinarily demanded U.S. companies doing business in China to leave the country.

Powell in his long-anticipated remarks at Jackson Hole dropped the "mid-cycle" reference to rate cuts which generated some turmoil earlier in the week. Once again, he said that the U.S. economy is in a good place, adding that policymakers will act as appropriate to sustain the expansion, FXStreet News reported. He sounded less concerned about inflation, indicating that "it appears to be moving back up closer to our symmetric 2% objective, but there are concerns about a more prolonged shortfall," and more concerned about external developments, pointing to slowing global growth and trade policy uncertainty for weighing on the economic outlook.

Mr Trump, again in an extraordinary burst of anger tweeted: "Who is our bigger enemy, Fed Chairman Powell or Chinese President Xi?"

"Trump seems to be irate that China reacted to what the U.S. has done and is basically having a mini-tantrum and is angry at everybody," David Katz, chief investment officer at Matrix Asset Advisors in New York told the Reuters Thomson news agency Friday. "He's angry at China, he's trying to put the blame on the market and the economy on Powell."

"But at this point, it's very clear that the issues that have been coming to fruition of late with the economy and the slowdown are all trade-related and have very little to do with the Fed," Katz added.

The Dow Jones Industrial Average plunged 623.34 points, or 2.37%, to 25,628.90.

The Standard and Poor's 500 shed 75.84 points, or 2.59%, to 2,847.11.

The Nasdaq Composite did worst of all, giving up 239.62 points, or 3%, to 7,751.77.

The U.S. dollar also fell sharply following the Trump tirades. The euro soared to 1.1143. The Japanese yen jumped more than a cent to 105.38. The British pound rose sharply to 1.2278.

The Swiss franc was sharply higher at 0.9748. The New Zealand dollar appreciated to 0.6405.

Only the Australian dollar remained listless, and barely changed at 0.6754.

On overseas equity markets, in London the FTSE 100 fell 0.47%. The German Dax weakened by 1.15%, while in Paris, the CAC 40 was 1.14% lighter.

On Asian markets, in Japan the Nikkei 225 closed up 82.90 points or 0.40% on Friday at 20,710.91.

China's Shanghai Composite advanced 13.99 points or 0.49% to 2,897.43.

The Australian All Ordinaries rose 21.30 points or 0.32% to 6,614.30.

In Hong Kong, the Hang Seng jumped 130.61 points or 0.50% to 26,179.33.

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