Published: Tue, April 10, 2018
Money | By Wilma Wheeler

Stocks whipsaw as US proposes more China tariffs

Stocks whipsaw as US proposes more China tariffs

It fell as much as 767 points.

Stocks are falling sharply again as trade tensions heat up between the USA and China. "The tariff threats, even if only intended as bargaining tools, will be hard to back down from if talks fail to deliver results", Capital Economics' Julian Evans-Pritchard wrote in a research note Friday.

Washington and Beijing's game of chicken is wearing on Wall Street.

'These potential trade wars are not good for the market, ' said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

Negative sentiment in the stock market was fueled after President Trump threatened another $100 billion of tariffs on China imports.

The trade tensions overshadowed the latest U.S. jobs report, which showed hiring cooled by more than forecast in March.

White House officials, including top economic adviser Larry Kudlow, have sought to ease business leaders' fears of a trade war that would slow down the economy.

"Our view remains that a negotiated solution is most likely, and so the tariffs ultimately won't be implemented or will be much milder if they are", said Shane Oliver, head of investment strategy at AMP Capital in Sydney. The US economy added just 103,000 jobs in March, well below the 170,000 forecast by economists polled by Bloomberg MarketWatch. Investors were watching that number because it's a barometer of inflation.

With administration officials sounding conciliatory one day and more hostile the next and the president always quick to fire off another tweet, investors simply don't know what the US wants to achieve, said Katie Nixon, chief investment officer for Northern Trust Wealth Management.

The U.S. Treasury puts the closing yield on the 10-year note at 2.77%. But even though investors are optimistic about the state of the global economy and company profits continue to grow, Nixon said the administration is creating the thing investors hate the most: uncertainty. "In an interview on CNBC, he reiterated that the "(U.S.) is not in a trade war" but wouldn't rule out that the current tit-for-tat between the two countries "is not the beginning of one".

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