U.S. Stocks Lower Today, Thanks to China, Regulatory Reform
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The U.S. stock market is following up on Friday’s losses, with the stock market responding with jitters to the latest spat between the U.S. and China. This time, though, it isn’t about a global reserve currency; it’s about trade. Things started heating up when the U.S. announced that special duties would be imposed on Chinese tires. This led to concern that the U.S. might tack on additional duties, since Chinese product issues have been such big news lately. China, as might be expected, responded in kind, threatening to go before the World Trade Organization to complain. And the country even threatened its own duties. The idea that a U.S.- China trade war could break out is one that is unsettling to investors.
The news caused investors to show concern about the state of the fragile world economy. China is a huge trading partner for the U.S., and is widely seen as one of the hopes for economic recovery. Investors are concerned about antagonizing the country that many believe will be the next global super power. In the end, however, things are likely to calm down. The U.S. knows that it has very little real influence over China anymore, things are likely to blow over.
Obama speaks on regulatory reform
Hoping that things would pick up in the stock market, President Barack Obama spoke on regulatory reform today. However, much of his thunder was stolen by the situation with China. Additionally, Wall Street has been quite lukewarm to the idea of simpler regulations that require transparency in business and that are more enforceable.
However, some of the bulls are encouraged by the fact that it appears as though these developments are not seriously causing problems on Wall Street. After all, the Dow is down by less than 30 points. Hardly a rout.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
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