25.04 - Dollar is up, technology stocks are down
- by Anna K.
With dollar growing and hitting monthly highs for several days in a row markets don’t seem as stable with European and Asian indices and stocks being in the red zone in the middle of trading week. Oil and precious metals are also losing price. NAFTA talks are moving forward and China is trying to find new ways to boost the economy.
Ministers of US, Canada and Mexico are still involved in NAFTA negotiations. Meeting that took place in Washington seems to have had some turn-around moments as Canadian officials have finally made out a formula for auto industry – the biggest issue for Canadian side of the agreement. Less and less differences are left in the main issues of the officials and that left Donald Trump very pleased.
“NAFTA, as you know, is moving along. Mexico have an election coming up very soon. But we’re doing very nicely with NAFTA. I could make a deal really quickly, but I’m not sure that’s in the best interests of the United States. But we’ll see what happens,” Trump said.
The main point of NAFTA negotiations for both Americans and Canadians is producing more parts for the automobile industry on the territory of North America, so that the citizens get more jobs created for them. For example, US are hoping to resurrect Detroit manufacturers with this piece of agreement. The topic of auto production is the main point in the negotiations and reaching an agreement that would suit all the sides of the NAFTA will mean entering the finishing stage of the negotiations.
For now, the meetings are still ongoing and will take place for several more days.
With trade pressure from the American sanctions still hanging over China, officials are trying to come up with the new ways to soften the blow and see that the new segments of the economy are developed properly. And this time something new arose – chip production.
China now is going to go for the title of the leader producer of chips and semiconductors. This is the clear move on the American segment of the markets and it wasn’t anticipated by Americans. Chinese government has declared that they now need to find about $32 billion in order to finance the program, so the whole industry is now in search of foreign investors. Boost to domestic firms is expected to be massive.
The spokesman for Ministry of Industry of China commented on the decision: “The second phase of the national IC fund is still raising money. We welcome overseas companies to participate in the fund.”. For now, the production of semiconductors is mainly an American business, but China is set to take the lead in the industry.
The need of China to produce their own semiconductors also comes from America blacklisting import of the details to China.
European stocks are looking at Asian counterparts at the latter are heading down so the investors are fearing that big losses are coming to the field soon as the selloff in technology stocks is once again facing the trades.
Stoxx Europe 600 declined 0.6 percent.
DAX lost 0.2 percent.
MSCI Asia Pacific fell 0.6 percent.
S&P 500 Futures lost 0.3 percent.
Topix declined 0.1 percent.
Kospi is 0.6 percent lower.
Dollar increased 0.3 percent against the basket of six major currencies and is now at the strongest point in 15 weeks.
Euro fell by 0.2 percent to the weakest position in 2 months - $1.2208.
Pound lost 0.2 percent - $1.3951.
Yen sell 0.3 percent – 109.17 yen per dollar.
WTI oil costs $67.55 per barrel after having lost 0.2 percent.
Gold went down 0.2 percent - $1.232.96 per ounce.