Inventories are trending down as emerging markets plummet in Bear territory

The market minute of Thursday

• Weak emerging markets and continued trade tensions between the US and China weighed on global stocks on Thursday as Asian stocks slid to their lowest level in several weeks.
• President Trump could impose tariffs of $ 200 billion on products made in China at an additional 25% from today, but insists that no plan is in place. in place and that negotiations are underway.
• Emerging market equities are only a few points away from the bear market, with investors fleeing risk markets around the world, threatening the potential contagion of equities elsewhere.
• US equity futures predict another Wall Street red day, with the S & P 500 forecasting a 6.1-point decline.

Snapshot of the market

Global stocks fell on Thursday as emerging-market equities were at the edge of the bear market and investors were preparing for yet another potentially damaging escalation of the ongoing US-China trade war.

Emerging markets currencies in Asia have returned to day-to-day trade, with the Philippine peso suffering heavy losses as shares fell 2.4%, the highest in two months. . The MSCI Emerging Markets index, which fell 1.77% on Wednesday, is just a few points behind the 20% drop from its peak on January 29, which would rock the benchmark worldwide in bearish territory.

The threat of contagion from the liquidation of emerging markets, accelerated by the strength of the US dollar, further reduced the Asian equity gains on Thursday, returning the ex-Japan MSCI Asia ex-Japan index by 0.88% in the last trading hours. . and pushing Japan's Nikkei 225 to 0.4% in the red for its fourth consecutive decline.

Investors have also observed the developments of the trade war between the United States and China now that a public consultation on the impact of new tariffs on the $ 200 billion of goods manufactured in China ends more late today, allowing President Donald Trump to apply them whenever he deems it appropriate.

"We have negotiated very well with China, but we are not ready to conclude the deal they would like to conclude," Trump told reporters yesterday in Washington. "We will continue to talk to China.I have a lot of respect for President Xi.But for the moment, we simply can not do this business."

Conciliatory tone did not help stocks in China as emerging markets chaos rushed into the world's second largest economy, pushing the Shanghai Composite Index by 0.5% and cutting the index by 1.35%. Hang Seng from Hong Kong. The Chinese Ministry of Commerce said the country would be forced to retaliate if the United States were to pursue the new tariff threat.

European markets were also weaker at the start of the session, with the Stoxx Europe 600 index down 0.22%, driven down by banks and core stocks and similar declines in Germany. and in France.

The British FTSE 100 fell by 0.25% at the start of trading in London, with gains capped yesterday, bringing the currency to 1.2903 against the dollar, according to a Bloomberg report . terms in the Brexit negotiations.

US equity futures also struggled to reverse this week's declines, which were down about 0.27% from the S & P 500. , with contracts linked to the broader benchmark showing a decline of about 6.1 points. The Dow Jones Industrial Average , which has kept its head around 10 points over the water this week, is looking for a 67-point slide early in the negotiations.

Technology and social media markets are expected to focus again on Thursday after US Attorney General Jeff Sessions announced he would meet with attorneys general on September 25 to determine if social media platforms were blocking freedom of choice. expression, especially for conservatives. legislators and commentators.

This decision follows a day of heavy losses for Facebook Inc. (FB) and Twitter Inc. (TWTR) after senior executives, including Twitter CEO Jack Dorsey, were confronted with tough questions the US election process .

In addition to equities, the US dollar index fell to 95.15 after a two-week high in overnight trading, although the greenback should continue to rise. pace for a 4.7% advance this quarter, according to the Atlanta Fed's GDPNow estimate, after data Tuesday showing that US manufacturing activity has reached the fastest pace in 14 month.

World oil prices were moderately lower overnight, as investors cite the impact of declining emerging market demand and the less than expected impact of Tropical Storm Gordon on Iranian crude sales.

Brent crude contracts for delivery in November, a global benchmark, fell by a few cents from their close on Wednesday in New York and rose to $ 77.26 per barrel while WTI contracts for the same month