Summary for the 6th of May 2019


The trade talk between the US and China got a new turn after president Trump last night announced possible tariffs increase.

The US annouced possible increase of the trade tariffs to a 25% rate on 200 billion dollars’ worth of Chinese goods from Friday. Currently the trade tariff is at 10%. Additionally, president Trump is announcing that about 325 billion dollars worth of Chinese goods that currently aren’t affected by tariffs, risked being imposed a tariff rate of 25%. The Chinese stock index falls by 6% after the news.

Friday’s jobs numbers from the US showed a solid labor market. Non farm payrolls for April increased by 263 000, the market was expecting an increase of 190 000. The unemployment rate for April declined by 0.2% to 3.6%. Even with a strong non farm payrolls increase and lower unemployment rate, the average hourly earnings hadn’t increased by much. Average hourly earnings increased by 0.2% from March to April, lower than market expected, giving a year on year increase of 3.2%. The hourly earnings growth had been at this level since the last half of 2018, after a strong increase at the first three quarters of 2018. This supported the Fed’s signal of a muted inflation growth, also this should be seen together with an increase in productivity. A rate hike is thus less likely for now.

Indices for 6th of May. Better than expected jobs numbers lifted the US stock markets on Friday. The announcement of possible tariffs increase had affected the Asian stock markets today.

Dow: +0.8% (3rd of May)
S&P 500: +1% (3rd of May)
Nasdaq: +1.6% (3rd of May)
Nikkei: Closed  (6th of May)
Chinese indices: -6.0% (6th of May)
STOXX Europe 600 Index: -0.88% (6th of May)

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