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Saturday, February 27, 2021

Factory data, trade worries sink Wall Street

Duration: 01:49s 0 shares 1 views
Factory data, trade worries sink Wall Street
Factory data, trade worries sink Wall Street

Wall Street lost ground on Thursday as data showed midwest manufacturing falling into a deeper slump and concerns about the U.S.-China trade war truce rattled investors.

Conway G.

Gittens wraps up the trading action.

Declines on Wall Street, Thursday amid more signs of strain on the factory floor and worries the trade war truce between the U.S. and China is on shaky ground.

All three major indices finished lower but well-above the lows of the day.

Manufacturing activity in the midwest fell in October to its deepest slump in four years, according to the Chicago Purchasing Managers Index.

The global manufacturing sector has been severely hampered by the 15-month trade war between Washington and Beijing.

Sam Stovall of CFRA Research makes the connection between Wall Street and trade: SOUNDBITE (ENGLISH) SAM STOVALL, CHIEF INVESTMENT STRATEGIST, CFRA RESEARCH, SAYING: "It's sort of a cascading effect, in the sense of about 50 percent of the revenues for the S&P come from overseas operations.

If you have a problem with a majority of your foreign markets, then that's going to artificially depress earnings and depressed earnings give less of a reason to want to bid up share prices.

So trade is the fulcrum of this see-saw." Thursday's reports sparked jitters ahead of Friday's important update on hiring.

Traders were further spooked by a Bloomberg report that Chinese officials doubt whether a wide-ranging long-term trade pact with Washington is possible.

Meanwhile, trying to keep confidence alive, President Trump said on Twitter, that after Chile canceled the APEC meeting because of domestic unrest, the U.S. and China will soon announce a new location where they will sign, what is being called phase one of their trade deal.

And that wasn't the only tweet from the President.

He once again criticized Federal Reserve Chairman Jerome Powell for keeping rates too high and for putting the U.S. at a "competitive disadvantage." Trump is still unhappy even though the Fed has cut rates three times this year.

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