HONG KONG: Markets slowed down over the weekend as investors recouped benefits brought on by the prolonged China-US trade war. After enjoying one of their best days since Donald Trump released his” Liberation Day” tax bazooka last month, the industry slowed.
The Fed may cut interest rates this time, but data showed US retail prices increased less than expected next month and retail sales were flat, keeping pace with below-forecast consumer inflation figures. This gave the dollar an edge over the previous month.
Oil prices rose, but they are still subdued after falling on Thursday ( May 15 ) on hopes for a breakthrough in the Iran nuclear talks after Trump claimed progress had been made on a deal.
Investors are now awaiting confirmation from the US senator regarding the status of discussions with his nation’s buying companions as governments work together to prevent his high tariffs.
However, experts caution that the fervor over Beijing and Washington’s detente, which saw them reduce tit-for-tat taxes for 90 days to allow for discussions, has good vanished due to the fact that taxes are also high and pose a threat to financial development.
It is still true that tariffs on products entering the US will become significantly higher than anyone would have thought, according to IG chief business analyst Chris Beauchamp.
The impact will only begin to be clear in upcoming earnings reports, though it may lead to a not-unsignificant hit to earnings.
” The problem for all traders is, have businesses already priced in enough bad news to prevent further declines in the year after their significant losses in the first quarter of April?”
Walmart, the head of US wholesale, warned about price rises brought on by Trump’s tariffs on imports from other countries.
CEO Doug McMillon applauded the easing of strained relations with China, but he claimed his company’s taxes remained very high.
After reporting a strong third of revenue, he declared,” We did do our best to keep our rates as low as possible, but given the magnitude of the taxes, even at the reduced amounts, we aren’t able to capture all the force.”
Asian markets dropped in morning trading.
After the release of data showing Japan’s economy experienced its first quarterly contraction between January and March, Tokyo slowed.
Alibaba, the e-commerce giant, shed more than 4 % after reporting a disappointing increase in first-quarter revenue as Chinese consumer spending remained stagnant. In addition, Hong Kong fell.
Other tech companies saw lower sales, with Tencent, Meituan, and e-commerce rival JD.com among the decliners.
Sydney, Seoul, and Taipei all increased while Shanghai, Singapore, Wellington, and Manila all fell.