European shares fell on Friday after US President Donald Trump furiously reacted to China’s latest imposition of tariffs on certain US goods, while a lack of direction in the US central bank’s rate outlook somewhat frustrated investors.
In a surprise move, Beijing imposed additional tariffs on thousands of US products effective on Sunday next week, infuriating Trump, who hit back asking US companies to start looking for alternatives to their China operations.
“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing ... your companies HOME and making your products in the USA,” Trump said as part of a series of tweets.
Markets reacted sharply to those developments, with Wall Street indexes shedding more than 1 percent and the pan-European STOXX 600 ending 0.7 percent lower after a volatile session.
The benchmark index still rose 0.5 for the week, its first gain in four weeks.
Germany’s trade-sensitive DAX fell 1.2 percent on Friday, but was up 0.4 percent for the week.
Trade-sensitive autos, mining and tech stocks were the biggest losers across Europe on Friday, while defensive real-estate stocks were the only ones in positive territory.
European equities have seen wild swings this month amid fears that the economic effects of the trade dispute could tip major economies into recession.
“The trade war will only get uglier and cause both sides more economic pain before we see a final resolution,” Oanda Corp senior market analyst Edward Moya said. “Trump is going to try to gather as many chips as he can to try and punish China before settling on a deal that appeases a majority ahead of the 2020 US presidential elections.”
US Federal Reserve Chairman Jerome Powell’s latest comments also came under Trump’s attack as the US president asked whether his appointee to the central bank was a greater “enemy” than Chinese President Xi Jinping (習近平) to the US.
Powell, in a much anticipated speech at an economic symposium at Jackson Hole, Wyoming, said that the US central bank would “act as appropriate” to keep the economic expansion on track, but did not offer a clear indication on interest-rate cuts.
“His statement wasn’t as clear as we hoped it would be, but it was enough to show that he was at least leaning towards a rate cut in September,” Rabobank NV senior US strategist Philip Marey said.
London’s FTSE 100 had its fourth straight week of losses as it fell 0.3 percent, the longest streak since February.
Oil majors Royal Dutch Shell PLC and BP PLC had the biggest negative impact on the day.
Among individual stocks, Kloeckner & Co shares jumped 7 percent after a newspaper said Thyssenkrupp AG was in talks to buy the metals distributor.
Peppa Pig owner Entertainment One Ltd hit a life-high after agreeing to be acquired by Hasbro Inc.
TV and online retailer Momo.com Inc (富邦媒體) yesterday said it has set up a new logistics subsidiary, Fu Sheng Logistics Co (富昇物流), to oversee the company’s extensive shipping operations. Leveraging Momo’s 23 satellite warehouses and distribution centers nationwide, Fu Sheng will be in charge of executing the retailer’s same-day shipment plan for deliveries in Taipei, New Taipei City, Taoyuan, Taichung, Tainan and Kaohsiung, Momo said in a press release. Seeking to further shorten its supply chain, the company is to set up another seven satellite warehouses and distribution centers by the end of the year. “Fu Sheng has a fleet of 200 couriers
US-CHINA TENSIONS: The company said that it supplies self-designed chips to the Chinese company and, as such, is not affected by the latest US export restrictions Macronix International Co (旺宏電子) said it does not expect its shipments of memory chips to Huawei Technologies Co (華為) to be affected by the latest US export restrictions on the Chinese tech giant. “As long as the company [Huawei] places orders, we will ship [chips], unless the [Taiwanese] government restricts all Taiwanese companies from shipping” to Huawei, Macronix chairman and chief executive officer Miin Wu (吳敏求) said on Monday in Hsinchu. The US Department of Commerce on Friday took a further step to block chip supplies from non-US companies to Huawei by requiring foreign semiconductor makers to get US government permission before
‘ACCORDING TO PLAN’: A company official said that it has set up production sites worldwide to provide services and that its Wisconsin project was going smoothly Hon Hai Precision Industry Co’s (鴻海精密) smart manufacturing center in Wisconsin would begin trial manufacturing in the middle of this year, the company said yesterday, adding that it plans to build a research institute to develop key technologies to support growth over the next five years. Hon Hai, known internationally as Foxconn Technology Group (富士康科技集團), said in an annual report submitted to the Taiwan Stock Exchange that its planned Foxconn Institute for Research in Science and Technology would conduct research into artificial intelligence, next-generation communications, quantum computing, cybersecurity and nano semiconductors in Taiwan. Hon Hai is to make products at the center
E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season. Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39. E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed. E Ink said that it expects royalty income to