Skip to main content

Markets Begin the Week Mixed Amid Global Trade Uncertainty

Asian markets opened the week on a mixed note after Wall Street hit new highs. Tokyo and Shanghai were up, but the Hang Seng and Taiwan’s Taiex were down, reflecting the global uncertainty despite a brief bout of optimism.

Much of the bullishness in the US was triggered by Canada’s about-face on taxing US tech companies, which got trade talks back on track. According to the Associated Press, Canadian Prime Minister Mark Carney said talks were back on, and markets were calm. Result? The S&P 500 rose 0.5% to 6,173.07, the Nasdaq 20,273.46 and the Dow 1% to 43,819.27.

It wasn’t just tech that was driving the rally. Almost every sector in the S&P 500 was up, including Nike, which rose 15.2% despite warning of a tariff hit to earnings. That’s kind of the theme of the week.

In Asia, Japan’s Nikkei 225 was up 0.6% and China’s Shanghai Composite 0.5%, possibly helped by a slight improvement in factory activity after US-China tariffs were postponed in May. But Chinese manufacturing is still in contraction. South Korea’s Kospi and Australia’s ASX were up 0.5% and 0.6% respectively.

But not all markets were optimistic. The Hang Seng was down 0.3%, Taiwan’s Taiex 1.4% and India’s Sensex 0.4%. The divergence suggests investors were quick to react to good news, but many are still cautious about the bigger picture.

And honestly, they should be. Inflation in the US is still rising – May data showed prices rose again, as expected (Reuters). Not an immediate crisis, but it’s keeping pressure on households and clouding earnings forecasts for companies that import. And then there’s the wild card: tariffs. The Wall Street Journal reports the administration has kept 10% baseline tariffs on imports and 25% on China, and more to come. Trump told Fox News he’ll be sending letters to countries soon warning them that penalties will kick in unless deals are signed by July 9. That looming threat has markets, especially in Asia, on high alert.

So yes, US stocks are at records. But it’s hard not to feel like they’re skating on thin ice. One misstep in trade talks, an unexpected inflation spike or a sudden tweet, and this could all reverse. The mixed reaction in Asia seems more like a gut check than hesitation.

Comments

Post a Comment

Popular posts from this blog

What's Really Going On With US Stocks and China Tariffs

 Trade talks between the US and China are once again trending in the markets, this time pushing the markets upward. Now, Goldman Sachs Research confidence suggests that the  S&P 500 Index , which tracks 500 of the largest US companies, will go up  11% over the next year  to 6,500, mainly on the back of better trade relations and the chances of lower tariffs. Tariffs are taxes that governments put on imported goods. If the United States levies tariffs on Chinese products, American companies would have to pay higher prices when importing from China. Those companies could turn around and pass on the increased prices to the end consumers, absorb them themselves and hit their profits, or communicate these costs to suppliers. Investors are watching to see which companies will be hammered the hardest. Recent earnings did look good; US companies saw profits grow by 12% year over year last quarter, but that was before the effect was being felt from the new tariffs was fel...
Post a Comment
Read more

Best Stocks to Watch According to Top Analysts

Markets always remain uncertain, inflation being the theme, rate policy is the other, with geopolitical tension thrown in between. Double wondering, long-term investors prefer to refuse to hear any temporal noise. Instead, there are companies with structural tailwinds, margin expansion stories, and consistent execution on their radar. Here is a list of six names that have really been shining as of today. Chewy (CHWY) Doug Anmuth from JPMorgan remains bullish with an upward target revision to $47 for Chewy. The market punishment was too harsh for free cash flow going down, especially since customer count was up and Autoship engagement was stronger. This is an underestimated name in my opinion. Pet care is sticky spending, and Chewy's building recurring revenue through Autoship should have some resilience against investor thoughts. Execution has gotten better, and if the company can maintain its margin trajectory, it can have real upside. Pinterest (PINS) Bank of America sees very st...
Post a Comment
Read more