Wall Street stocks bounced back from big early losses in Friday session, but still fell short on the day and closed lower as trade-related jitters with China and the EU dominated some surprisingly strong economic data.
Chinese state media reports seem to suggest that the country’s government has little interest in resuming talks with the US following Trump administration’s move to raise tariffs on Chinese imports.
Analysts say that while this is likely a negotiating stance, it does suggest talk – some of which was stirred up by Trump last week – on progress in the dispute is misplaced and that the economic standoff between the two largest economies may be long and painful.
They contrasted the uncertainty of the situation with China with the settlement of steel tariff disputes between the Trump administration, Canada, Turkey and Mexico, and the apparent postponement of a final decision on tariffs on car imports from the EU.
The surprising bit of economic news was the sharp rise in US consumer confidence in spite of all the trade row publicity and negativity surrounding Trump.
Consumer sentiment rose to a 15-year high of 102.4 in May, well above the 97.1 expected by economists and April’s reading of 97.2, according to the University of Michigan’s consumer sentiment index.
And the Conference Board’s estimate of leading economic indicators rose for the third straight month in April to 112.1, up 0.2% from March. The survey of economic conditions is a collection of forward-looking data that attempts to predict future economic growth and belies the weak activity reading for manufacturing and services earlier in the month and the slide in retail sales in April.
The end result of all of this on Friday was losses all round for the major indices, although they could have been much larger if the Wall Street had closed at the day’s lows.
But the Dow lost 98.68 points, or 0.4%, to end the week at 25,764 and the S&P 500 index shed 16.79 points, or 0.6%, to 2,859.53. The Nasdaq Composite Index declined % or 81.76 points, to end at 7,816.28.
For the week the Dow lost 0.7% for the week, (bringing its weekly losing streak to four, the longest since May 2016), the S&P 500 fell 0.8% while the Nasdaq dropped 1.3%.
The 10-year Treasury note yield fell 1.1 basis points to 2.396%, off an intraday low of 2.364%. The benchmark yield slipped 5.9 basis points this week. (The Australian 10-year bond yield ended down at 1.64%, a record low).
