So will the strong run on the ASX 200 come to an end Friday after Wall Street closed lower through a 360 point turnaround?
The switch was due to Donald Trump revealing he plans a press conference on Friday on China – presumably on the tightening of China’s control of Hong Kong.
That saw US shares suddenly take fright after they had ignored a 2.1 million rise in jobless claims to nearly 41 million in the past 10 weeks, a deepening in the first quarter fall in GDP to an annual rate of 5% from 4.8% first reported a month ago and a record 17% slump in durable goods orders in April.
Share prices had risen despite this bad news – which economists said indicated the slide in the US economy will be deeper than thought and take longer to recover from – some estimates put second-quarter GDP falling by an annual 40% after the release of the latest data.
The Dow was up more than 200 points before news of the China press conference broke. It then fell and lost 147.63 points, or 0.58%, to close at 25,400.64. The S&P 500 eased 6.4 points, or 0.21%, to 3,029.73 and Nasdaq dropped 43.37 points, or 0.46%, to 9,368.99.
The falls ended three days of gains and a similar outcome is possible here in Australia with the ASX 200 futures trading showing a 15 point loss at 7.15 am Friday, Sydney time
The ASX 200 is up 354 points since the close last Friday, including Wednesday’s narrow 5 point loss.
Shares in social media stocks fell after the White House said Donald Trump had signed an executive order which removes a liability shield they currently enjoy.
The president signed an order he said instructed his officials to re-examine the 1996 law that granted social media companies immunity from being sued for the content that appears on their platforms, or for removing content.
The review comes after a bitter row with Twitter, which placed “fact check notices” against two of his tweets earlier in the week. US legal experts say the order will not support a legal challenge but if it turned into law, it would force the social media companies to crack down harder on his Tweets.
Still Twitter shares – which the order is really aimed at – fell 4.4% and Facebook shares lost 1.6%.
China is back on the fear agenda after Chinese legislators approved the new security laws for Hong Kong. White House economic adviser Larry Kudlow told CNBC on that Hong Kong may now be needed to be treated like China when it comes to trade and other matters, echoing remarks by Secretary of State Mike Pompeo on Wednesday.
And then the White House announced that Trump would hold a press conference on Friday on China.
US political analysts said the attack on social media and the resurrecting of issues with China are a diversion from trump’s biggest problem, his weak handling of the COVID-19 pandemic which has cost him considerable political support, especially from his base among older votes.
US West Texas Intermediate crude futures rose 90 cents to settle at $US33.71 a barrel while in Europe, Brent crude futures rose 55 cents to settle at $US35.29.
Comex August gold which is now the most-active contract, ended $US1.50, or 0.1%, higher at $US1,728.30 an ounce, well off its intraday high of $US1,743.70.
Comex July silver rose 21 cents, or 1.2%, to end at $US17.967 an ounce. Comex July copper added 3.15 cents, or 1.3% to settle at $US2.4135 a pound.
