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By CCN Markets: US stock markets are closed for Labor Day, but the futures market looks bleak as September approaches. The futures on the Dow Jones Industrial Average (DJIA) fell slightly on Monday, prolonging the stock market slump in August, which resulted in the 2% wipe out of the Dow.
The fall of early September came after the entry into force on Sunday of the new wave of tariffs of China at Trump. China immediately responded with new tariffs.
Dow's futures contracts bleed at Labor Day
The futures on the Dow Jones Industrial Average (DJIA) lost 80 points before recovering slightly Monday. The move is accompanied by low volumes while traders pause for Labor Day.
Futures on the S & P 500 Index and the Nasdaq Composite were also muted.
New Chinese tariffs weaken the Dow
Sunday, Trump imposed a new tariff of 15% on $ 110 billion of Chinese products. This wave includes footwear, clothing and electronic products such as the Apple Watch.
World stocks start a little lower in the week as new tariffs between the United States and China add to the global catastrophe. China is resisting the trend as factory activity unexpectedly increases in August, as indicated by the PMI (50.4) of the Markit factory. The United States is closed for Labor Day. Lower bonds w / US 10y at 1.5%. Bitcoin at $ 9.8k. pic.twitter.com/KJrXKaO4t6
– Holger Zschaepitz (@Schuldensuehner) September 2, 2019
A new wave of $ 160 billion worth of goods, such as laptops and mobile phones, has been postponed until December in the hope of avoiding a holiday gift crisis. The last tariff cycle, focused on consumer goods, is expected to have a direct effect on prices.
China reacted instantly with new tariffs of 5 to 10% on US agricultural products. So much for the relaxation of the trade war.
The massacre of the August purse
Monday's slide shows little change in investor sentiment after a crushing August in the stock market. Global stock markets sold $ 3 trillion in August, as the Dow Jones Industrial Average lost 2% over the month.
The sale was triggered by the inversion of the yield curve of US Treasury bonds, a classic and reliable recession indicator.
Wall Street giant, UBS, warned that a recession was becoming more likely due to the uncertainty associated with the trade war, and prompted investors to purge their stock portfolio. .
"[Trade war escalations] justifies a risk reduction in our portfolios to reduce our exposure to an uncertain political environment. "
Trade negotiations scheduled for September
The only light at the end of the tunnel for investors is a freely promised meeting between the United States and China scheduled this month.
Speaking to the White House, Trump said the meeting was still on the schedule, but warned that he would not back off easily.
"We can not let China rip us off as a country anymore."
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