2nd Sep 2019 08:08
(Alliance News) - The Trump administration's latest tariffs in the tit-for-tat US-China trade war came into effect Sunday, for the first time targeting Chinese consumer goods, including televisions, books, nappies, and sports shoes, dpa reported.
The previously announced additional 15% tariffs on USD112 billion worth of goods imported from China are, according to experts, likely to raise prices for US consumers in the medium term.
At the same time, Chinese tariffs of 5% and 10% targeting around USD75 billion of US goods came into force.
The moves are the latest in a year-long trade war that is slowing the world economy.
A further tranche of 15% US tariffs on USD160 billion of goods is set to enter effect on December 15, hitting further consumer goods such as smartphones, laptops, and clothing.
The tranche, which had originally been set to also take effect Sunday, was delayed by President Donald Trump in order to avoid hitting Christmas sales.
Meanwhile, IHS Markit on Monday revealed the Caxin China manufacturing PMI reading for August was 50.4, up from 49.9 in July and back in expansion territory.
"China's manufacturing sector showed a recovery in August, mainly due to improved production activity," commented Zhengsheng Zhong, director of Macroeconomic Analysis at CEBM Group.
"However, overall demand didn't improve, and foreign demand declined notably, leading product inventories to grow. There was no sign of an improvement in companies' willingness to replenish inventories of inputs or in their confidence. Industrial prices trended down. China's economy showed signs of a short-term recovery, but downward pressure remains a long-term problem. Amid unstable Sino-American relations, China needs to step up countercyclical policies."
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.5% at 7,241.66
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Hang Seng: down 0.8% at 25,518.48
Nikkei 225: closed down 0.4% at 20,620.19
DJIA: closed up 41.08 points, 0.2%, at 26,403.28
S&P 500: closed up 0.1% at 2,926.46
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GBP: soft at USD1.2165 (USD1.2178)
EUR: flat at USD1.0981 (USD1.0988)
Gold: soft at USD1,521.20 per ounce (USD1,528.74)
Oil (Brent): firm at USD59.14 a barrel (USD58.80)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
US and Canada Labor Day holiday. Financial markets closed.
0930 BST UK CIPS-Markit manufacturing PMI
0955 CEST Germany manufacturing PMI
1000 CEST EU eurozone manufacturing PMI
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UK Prime Minister Boris Johnson has dug in for trench warfare over Brexit as Tory rebels were put on notice they face losing the whip and being barred from standing for the party if they vote against the government. Johnson decided to get tough with rebels as he faced a torrid week which will be dominated by Commons clashes over his EU withdrawal stance. With opponents of a no-deal Brexit set to try to seize control of the parliamentary agenda on Tuesday, senior Tories like heavyweight grandees Philip Hammond and David Gauke were warned to back the government.
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Jeremy Corbyn will insist Labour is doing everything necessary to "bring Britain back from the brink" of Boris Johnson's Brexit plans. The Labour leader will use a speech in Salford on Monday to claim the prospect of quitting the EU without an agreement next month is adding to the "damage" done by Tory rule. Corbyn will say that manufacturing workers have lost out on on GBP55 a week since 2010. Speaking ahead of a meeting of the shadow cabinet to discuss preventing a no-deal Brexit, Corbyn will attack the prime minister's plans to suspend Parliament as an "attack on democracy which will be resisted".
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Italy's anti-establishment Five Star Movement (M5S) will ask its members to green light a proposed alliance with the centre-left Democratic Party (PD) in a contentious online vote. The M5S late on Sunday said that party members will be asked whether they agree that Prime Minister Giuseppe Conte should lead a coalition government formed by the once bitter rivals. Voting was due to take place on Tuesday from 9 am to 6 pm local time on the M5S's online platform, Rousseau. Conte, an independent who is nominally allied with M5S, on Sunday said Italy should have a new government cabinet by "Wednesday at the latest," thanks to successful negotiations between the M5S and the PD.
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Japan's government said investment by the nation's manufacturers dropped 6.9% from a year earlier to JPY3.6 trillion, about USD34 billion, in the April-to-June period, the first decline in two years amid economic uncertainty caused by a trade war between China and the US. Overall corporate investment by all non-financial sectors climbed 1.9% to JPY10.9 trillion in the quarter, significantly slowing from 6.1% in the previous period, Japan's Finance Ministry said. Separately, IHS Markit said Monday the Jibun Bank Japan manufacturing purchasing managers' index was little changed in August from July, reading 49.3 points versus 49.4 and remaining in contracting territory.
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Students in Hong Kong are planning to strike on the first day of classes following the summer holiday. The strike on Monday was planned as a continuation of nearly three months of fiery anti-government protests in Hong Kong, where mass demonstrations have called for electoral reforms and an independent inquiry into police conduct.
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Argentina on Sunday imposed foreign-exchange controls on exporters as it closed out a week of financial uncertainty that saw a sharp drop in the peso. Exporters were ordered to seek permission from the Central Bank of Argentina before purchasing foreign currency, according to a decree published in the Official Bulletin. In other new measures, transferring money abroad will now require government permission. And individuals seeking to buy dollars now face a monthly limit of 10,000 greenbacks. All these new measures will be in place until December 31. Last month, markets were rattled when pro-business President Mauricio Macri suffered a huge loss in primary elections, and his leftist opponent in October presidential elections Alberto Fernandez emerged as the favourite.
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Hurricane Dorian struck the northern Bahamas as a catastrophic Category 5 storm with record 185mph winds ripping off roofs, overturning cars and tearing down power lines. Dorian slammed into Elbow Cay in Abaco island at 12.40 pm local time on Sunday, and then made a second landfall near Marsh Harbour at 2 pm, after authorities made last-minute pleas for those in low-lying areas to evacuate. "It's devastating," said Joy Jibrilu, director general of the Bahamas' Ministry of Tourism and Aviation. "There has been huge damage to property and infrastructure. Luckily, no loss of life reported." With its maximum sustained winds of 185mph and gusts up to 220mph, Dorian tied the record for the most powerful Atlantic hurricane ever to come ashore, equalling the Labour Day hurricane of 1935, before the storms were named. There were indications that the slow-moving Dorian would veer sharply north-eastward after passing the Bahamas and track up the US Southeast seaboard.
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BROKER RATING CHANGES
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GOLDMAN RAISES UNILEVER TO 'BUY' (NEUTRAL) - PRICE TARGET 5700 (4850) PENCE
GOLDMAN RESUMES MARKS & SPENCER WITH 'SELL' - TARGET 170 PENCE
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COMPANIES - FTSE 100
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AstraZeneca reported positive results from the Brilinta trial and Farxiga trials. Brilinta reduced the risk for the composite of cardiovascular death, heart attack, or stroke by 10% compared with aspirin alone, Astra said. Farxiga on top of standard of care reduced both the incidence of cardiovascular death and the worsening of heart failure, Astra noted in a separate announcement. The company had reported topline results from the Farxiga study in August, releasing detailed results on Monday.
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Micro Focus International Executive Chair Kevin Loosemore has been additionally appointed as non-executive chair of banknote and passport printer De La Rue. Loosemore will become the chair designate of De La Rue on Monday before taking up the role on October 1. Loosemore will step down as chair of IRIS Software Group as a result of the De La Rue appointment, but remain in his role at Micro Focus. Micro Focus also said Darren Roos will step down as non-executive director, effective immediately. Roos represented Hewlett Packard Enterprise on the Micro Focus board but the period for HPE to appoint directors has expired, Micro Focus said.
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COMPANIES - FTSE 250
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Dechra Pharmaceuticals said it continued to "outperform almost all" markets in which it operates. In the year ended June 30, Dechra recorded operating profit of GBP39.0 million, 14% higher than the year before. Revenue grew 18% year on year to GBP481.8 million. Dechra upped its total dividend for the year by 24% to 31.6 pence from 25.5p. "The group has delivered another strong performance throughout the financial year. We have continued to outperform in almost all markets in which we operate and strategically it has also been an excellent year," said Dechra Chief Exectuive Ian Page.
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Woodford Patient Capital Trust has hired Jane Tufnell as independent non-executive director as the Neil Woodford-led investment trust continues to deal with the fallout from its open-ended sister fund freezing redemptions in June. At the beginning of June, Woodford took the decision to suspend withdrawals from his equity income fund due to "an increased level of redemptions", with the fund now needing time to "reposition" its portfolio invested in unquoted and less liquid stocks into more liquid investments. Tufenll co-founded Ruffer Investment Management. Susan Searle, chair of Woodford Patient, said Tufnell's fund management expertise and familiarity with investment trusts will bring "valuable experience" to Woodford Patient.
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COMPANIES - OTHER MAIN MARKET AND AIM
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Old Mutual said it was "pleased" with first half 2019 results, in a very difficult environment. The Anglo-South African financial services firm kept its dividend for the six months to June flat at 45 rand cents. It reported a 44% rise in pretax profit to ZAR7.23 billion, with revenue surging 48% to ZAR100.22 billion. This was boosted, Old Mutual said, by a significant rise in the non-banking investment return. Old Mutual's results from operations were up 2% to ZAR4.51 billion, with adjusted headline earnings rising 10% to ZAR5.21 billion. Funds under management at the half's end rose 5% from December to ZAR108.09 billion.
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COMPANIES - INTERNATIONAL
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Swiss firm Novartis said a heart failure treatment showed some positive test results, but did miss the primary endpoint. Novartis has been testing the safety and efficacy of Entrestro, made up of sacubitril and valsartan, compared to just valsartan in patients with heart failure. Entrestro, Novartis said, reduced the total number of hospitalisations and cardiovascular death by 13%, driven by a nearly 15% reduction in total heart failure hospitalisations.
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The court in Minal has permitted France's Vivendi to vote at Mediaset's extraordinary meeting, Vivendi said on Saturday. Mediaset had refused to allow Vivendi to vote at a meeting held on April 18, despite media firm Vivendi holding a 10% stake in the Italian broadcaster. Vivendi has reaffirmed its plans to vote against the proposed merger between Mediaset and a Spanish affiliate, creating a new firm called Media For Europe NV.
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Monday's Shareholder Meetings
Defenx
Redcentric
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