Investors shun stocks – retaliatory spiral in trade dispute

NEW YORK / FRANKFURT / WASHINGTON / PEKING (dpa-AFX) – Further escalating waves of the U.S.-China trade dispute drove investors out of the stock markets on Friday. Safe investments such as government bonds and gold were in demand, however.

China initially decided on new retaliatory tariffs on U.S. imports after the United States announced similar measures in early August. US President Donald Trump reacted shortly thereafter with verbal attacks and announced a reaction for Friday afternoon (local time).

The “like you mine, so mine” in the international trade dispute has once again fueled investor fears of a slowing global economy. The reactions were particularly violent on Wall Street, where the main American index Dow Jones Industrial recently fell almost 1.7 percent.

The Nasdaq 100 technology stock market barometer and Nasdaq Composite fell more than 2%. As a rule, they are particularly sensitive to economic news. The market is feeling Trump’s wrath, wrote market analyst David Madden of trading house CMC Markets UK.

In Europe, the EuroStoxx 50 has closed as a leading index for the euro zone and the Dax and the French stock market barometer Cac 40 each more than 1 percent less. The London FTSE 100 I fought a little better and gave in a little.

Systems perceived as safe were in demand, however. In this regard, investments have shifted to European and US government bonds. The price of gold has also increased.

In the commodity markets, oil prices notably fell. But other raw materials, including soy, have also come under pressure. China had announced that it would impose punitive tariffs on US imports of oil and soybeans from September 1.

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In total, US $ 75 billion worth of US goods must be subject to punitive tariffs of 5 to 10 percent. The rates are to come into effect partly on September 1 and partly on December 15. Car prices of 25 percent are expected to resume on December 15. In early August, the United States announced new punitive tariffs of 10% on Chinese imports valued at around $ 300 billion.

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