Volatility across global markets

Trade talks and rate cut rumours add light in market gloom

Traders on Wall St (pic: NYSE)Traders are factoring in a possible cut in US interest rates as concerns about a recession and a slowdown in China had a bruising impact on Wall Street.

The Dow Jones shed 2.8%, while the S&P 500 lost 2.5% and the tech-heavy Nasdaq took an even bigger blow, down 3% as Apple’s warning of a slowdown in sales impacted other technology stocks.

Shares in Japan also plunged on the first day of trading, with the Nikkei down 2.75% mainly on growth worries.

However, there was a spark of optimism over the prospects of an improvement in US-China relations after Beijing announced a new round of trade talks with Washington. Vice-ministerial level talks will take place next week and Chinese Premier Li Keqiang also hinted at further policy easing and support for small business.

Shanghai blue chips rose 2.1%, while South Korea bounced 0.6%.

Even so, traders are now betting on a potential interest rate cut by the Fed on the back of figures from the Institute for Supply Management showing US factory activity hit the brakes in December.

Apple cut its revenue forecast on Wednesday for the first time in nearly 12 years, blaming weaker iPhone sales in China. Its shares fell by more than 9%.

One analyst said this was more proof President Trump’s trade actions against China are now hurting the US as much as they are China,

There is growing evidence that China’s consumer drive has slowed and that they are buying more domestic goods rather than imported products.




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