iFund- Daily Market Commentary

2019-05-24 01:38
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China insists on that the United States must correct its wrong practices before resuming negotiations, and Trump said that Huawei is very dangerous and may be included in the US-China trade agreement. The US-China economic and trade confrontation has become worsen, dragging down US stocks and crude oil. The US 10-year bond yield has hit a 19-month record low, while safe-haven assets such as the yen and gold have risen. It is reported that Theresa May will announce the timetable for resignation as Prime Minister of the UK on Friday. The deputy governor of the People’s Bank of China once again called for a stable exchange rate. And the expected management of the central bank has worked, leading to offshore renminbi rising.

      • The Dow Jones Industrial Average closed at 25,490.47 points, down 286.14 points or 1.11%. The Standard & Poor’s 500 Index closed at 2,822.24 points, down 34.03 points or 1.19%. The Nasdaq index closed at 7,628.28 points, down 122.56 points or 1.58%.
      • US President Trump said that “Huawei is very dangerous” and Huawei may become part of a trade agreement with China. In addition, a group of bipartisan senators proposed  legislation to prohibit the use of Huawei and ZTE products in US 5G networks.
      • Trump will send another $16 billion in subsidies to farmers to ease the impact of the trade war. Together with the previously announced aid measures, the total amount of US agricultural aid during the trade war with China reached $28 billion.

      • The UK’s FTSE 100 index closed at 7,231.04 points, down 103.15 points or 1.41%. The Frankfurt DAX index closed at 11,952.41 points, down 216.33 points or 1.78%. The French CAC40 index closed at 5,281.37 points, down 97.61 points or 1.81%.
      • It is said that British Prime Minister Theresa May plans to announce her departure schedule after meeting with Graham Brady, a senior Conservative official on Friday.
      • Some ECB officials said at the April policy meeting that the inflation rate in the euro zone is still too low and inflation expectations are falling, which increases worries.

      • Japan’s Nikkei 225 index closed at 21,151.14 points, down 132.23 points or 0.62%. The yen closed at 110.040 against the US dollar, up 0.382%.
      • According to the data from Nikkei/Markit, Japan’s manufacturing purchasing managers’ index (PMI) in May unexpectedly got into contraction again after growth for two months, falling from 50.2 in April to 49.6. The market originally expected the index to continue rising to 50.5. During the period, the output and new orders index contracted for the fifth consecutive month; the contraction rate of new export orders continued to worsen; and the employment growth rate slowed down again. Enterprises are pessimistic about the prospects for the first time in six and a half years.

      • The Shanghai Composite Index closed at 2,852.52 points, down 39.19 points or 1.36%. The Shanghai and Shenzhen 300 Index closed at 3,583.97 points, down 65.41 points or 1.79%. The RMB closed at 6.919 against 1 US dollar, down 0.246%.
      • The latest statement from the Chinese Ministry of Commerce shows that China has no intention to make concessions to the United States to restart negotiations. The spokesman of the Ministry of Commerce said on Thursday that the United States must correct wrong practices and show sincerity before resuming negotiations, and China has sufficient policy tools to cushion the impact of trade wars.
      • Chinese central bank officials once again voiced a stable exchange rate. Liu Guoqiang, deputy governor of the central bank, said that the renminbi exchange rate is stable and there is no “abnomal fluctuation” which is also not allowed. Analysts said that the central bank’s expected management has worked, and the market has not seen panic.

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