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Trade war: Trump promises deal with China 'when the time is right' - business live Trade war: Trump promises deal with China 'when the time is right' - business live
(32 minutes later)
Back on Wall Street, every sector of the Dow Jones industrial average is up.
That’s a change from yesterday, when everything was taking a dive.
Donald Trump’s pledge to reach a deal with China, eventually, seems to be helping.
Consumer focused companies such as Coca-Cola (+2.5%) and Visa (+2.2%) are leading the rally followed by industrial and technology stocks including Cisco (1.95%) and Boeing (+1.5%)
Here’s the latest prices:
Dow: +193 points or 0.77% at 25,518
S&P 500: + 25 points or 0.9% at 2,837
Nasdaq: + 78 points or 1% at 7,726
Britain’s second largest steel firm has asked the government for emergency funding to prevent it from collapse, blaming “Brexit-related issues”.
British Steel, which employs 4,500 people at its Scunthorpe steelworks and several sister sites, is understood to be in talks with its lenders and the government over a £75m rescue package.
A spokesperson for the Department of Business, Energy and Industrial Strategy said they could not comment on speculation about injecting fresh funds.
But a British Steel spokesperson said:
“As we have previously commented, the uncertainties around Brexit are posing challenges for all businesses including British Steel, and we are holding constructive discussions with our stakeholders on how to navigate them.
BEIS refusing to comment on British Steel asking for government to stump up cash as part of a £75m rescue package, saying it's just speculation.Meanwhile British Steel says "discussions are continuing about a package of additional support".
This comes just days after the government lent British Steel £120m to cover its bill for an EU climate credits scheme.
Ken Odeluga, analyst at City Index, doesn’t believe today’s rally marks the end of the trade war jitters.Ken Odeluga, analyst at City Index, doesn’t believe today’s rally marks the end of the trade war jitters.
He says:He says:
Volatile gyrations require markets to go up as well as down; Tuesday brings the upswing.Volatile gyrations require markets to go up as well as down; Tuesday brings the upswing.
Nobody believes tariff turmoil is done; it would be difficult to do so given Washington’s signal that a further barrage of new 25% duties on $300bn of Chinese goods is in the works.Nobody believes tariff turmoil is done; it would be difficult to do so given Washington’s signal that a further barrage of new 25% duties on $300bn of Chinese goods is in the works.
Commodity prices are also rebounding a little. Soybean price are up almost 2% from yesterday’s 10-year lows.Commodity prices are also rebounding a little. Soybean price are up almost 2% from yesterday’s 10-year lows.
Ding ding! Shares are rising at the start of trading in New York, but it’s not a very strong rally.Ding ding! Shares are rising at the start of trading in New York, but it’s not a very strong rally.
The Dow Jones industrial average is up 88 points so far, a gain of 0.35% to 25,314. That doesn’t make much of a dent in yesterday’s 617-point selloff.The Dow Jones industrial average is up 88 points so far, a gain of 0.35% to 25,314. That doesn’t make much of a dent in yesterday’s 617-point selloff.
Technology stocks are recovering some ground, following Donald Trump’s pledge to reach a deal with China eventually.Technology stocks are recovering some ground, following Donald Trump’s pledge to reach a deal with China eventually.
Bloomberg have spotted a distinct change of tone in the Chinese media recently - towards more nationalistic rhetoric.Bloomberg have spotted a distinct change of tone in the Chinese media recently - towards more nationalistic rhetoric.
That could be a sign that Beijing wants to ensure the public back their leaders on this issue, and blame Donald Trump for the trade war. If so, that could mean they expect it to rumble on for a while.That could be a sign that Beijing wants to ensure the public back their leaders on this issue, and blame Donald Trump for the trade war. If so, that could mean they expect it to rumble on for a while.
Important story. After being very quiet on the issue for a long time, suddenly Chinese media is loudly taking a nationalist tone on trade issues https://t.co/Sgl56r3bgj pic.twitter.com/naM5it1KbLImportant story. After being very quiet on the issue for a long time, suddenly Chinese media is loudly taking a nationalist tone on trade issues https://t.co/Sgl56r3bgj pic.twitter.com/naM5it1KbL
Donald Trump simply can’t tear himself away from Twitter today.Donald Trump simply can’t tear himself away from Twitter today.
The president has now predicted that the People’s Bank of China will cut interest rates to stimulate its economy, to cope with trade war damage, and challenged the US Federal Reserve to do the same.The president has now predicted that the People’s Bank of China will cut interest rates to stimulate its economy, to cope with trade war damage, and challenged the US Federal Reserve to do the same.
China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing. If the Federal Reserve ever did a “match,” it would be game over, we win! In any event, China wants a deal!China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing. If the Federal Reserve ever did a “match,” it would be game over, we win! In any event, China wants a deal!
Some economist have also suggested the PBoC will be forced to ease monetary policy soon. But an aggressive interest rate cut would clash with Beijing’s efforts to clean up the financial system, reduce speculation, and clear out bad debts.Some economist have also suggested the PBoC will be forced to ease monetary policy soon. But an aggressive interest rate cut would clash with Beijing’s efforts to clean up the financial system, reduce speculation, and clear out bad debts.
It might also weaken the yuan -- and trigger capital flight if nervous Chinese citizens tried to transfer money out into dollars.It might also weaken the yuan -- and trigger capital flight if nervous Chinese citizens tried to transfer money out into dollars.
A record number of investors are bracing themselves for a stock market crash.A record number of investors are bracing themselves for a stock market crash.
Bank of America’s latest survey of market players found that a third of fund managers have hedged themselves against sharp falls in asset values in the next few months. More investors are also keeping money safe as cash, rather than investing in equities or bonds.Bank of America’s latest survey of market players found that a third of fund managers have hedged themselves against sharp falls in asset values in the next few months. More investors are also keeping money safe as cash, rather than investing in equities or bonds.
The survey also found that the US-China trade war remains the number one ‘tail risk’ which could derail the markets. It’s now been the top issue worrying investors for the past year:The survey also found that the US-China trade war remains the number one ‘tail risk’ which could derail the markets. It’s now been the top issue worrying investors for the past year:
After yesterday’s heavy losses, global stock markets are turning more positive - as Donald Trump’s latest tweets calm the mood.After yesterday’s heavy losses, global stock markets are turning more positive - as Donald Trump’s latest tweets calm the mood.
The main European share indices are all positive today, and Wall Street is also expected to open high (after its worst falls in months yesterday).The main European share indices are all positive today, and Wall Street is also expected to open high (after its worst falls in months yesterday).
UK FTSE 100: up 67 points, or 0.9%, at 7231UK FTSE 100: up 67 points, or 0.9%, at 7231
German DAX: up 64 points or 0.5% at 11,940German DAX: up 64 points or 0.5% at 11,940
French CAC: up 61 points or 1.2% at 5,324French CAC: up 61 points or 1.2% at 5,324
Donald Trump has now tweeted that a trade deal with China will be struck, “when the time is right”.Donald Trump has now tweeted that a trade deal with China will be struck, “when the time is right”.
In another early morning burst of tweets, the president cites his “friendship” with Xi Jinping - perhaps a hint of a deal at next month’s G20 leaders’ meeting?In another early morning burst of tweets, the president cites his “friendship” with Xi Jinping - perhaps a hint of a deal at next month’s G20 leaders’ meeting?
Curiously, Trump also mentions recovering “some” of the ground lost to China -- a hint that he could compromise to get a deal?Curiously, Trump also mentions recovering “some” of the ground lost to China -- a hint that he could compromise to get a deal?
When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense. We have to be allowed to make up some.....When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense. We have to be allowed to make up some.....
....of the tremendous ground we have lost to China on Trade since the ridiculous one sided formation of the WTO. It will all happen, and much faster than people think!....of the tremendous ground we have lost to China on Trade since the ridiculous one sided formation of the WTO. It will all happen, and much faster than people think!
He’s also repeated his pledge to help American farmers - a key demographic ahead of next year’s presidential elections.He’s also repeated his pledge to help American farmers - a key demographic ahead of next year’s presidential elections.
Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now. Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference based on a very high China buy......Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now. Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference based on a very high China buy......
....This money will come from the massive Tariffs being paid to the United States for allowing China, and others, to do business with us. The Farmers have been “forgotten” for many years. Their time is now!....This money will come from the massive Tariffs being paid to the United States for allowing China, and others, to do business with us. The Farmers have been “forgotten” for many years. Their time is now!
Newsflash: Donald Trump has launched a new Twitter onslaught, accusing nations such as China of treating the US as a ‘piggy bank’ .Newsflash: Donald Trump has launched a new Twitter onslaught, accusing nations such as China of treating the US as a ‘piggy bank’ .
The president also claims that his tariffs have helped US steel industry to boom (output is up a healthy 7% this year).The president also claims that his tariffs have helped US steel industry to boom (output is up a healthy 7% this year).
Trump adds that he won’t allow China to renegotiate the draft agreement drawn up during recent negotiations, even though the two sides could “make a deal tomorrow” if he chose.Trump adds that he won’t allow China to renegotiate the draft agreement drawn up during recent negotiations, even though the two sides could “make a deal tomorrow” if he chose.
In one year Tariffs have rebuilt our Steel Industry - it is booming! We placed a 25% Tariff on “dumped” steel from China & other countries, and we now have a big and growing industry. We had to save Steel for our defense and auto industries, both of which are coming back strong!In one year Tariffs have rebuilt our Steel Industry - it is booming! We placed a 25% Tariff on “dumped” steel from China & other countries, and we now have a big and growing industry. We had to save Steel for our defense and auto industries, both of which are coming back strong!
China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position. Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China.....China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position. Make your product at home in the USA and there is no Tariff. You can also buy from a non-Tariffed country instead of China. Many companies are leaving China.....
....so that they will be more competitive for USA buyers. We are now a much bigger economy than China, and have substantially increased in size since the great 2016 Election. We are the “piggy bank” that everyone wants to raid and take advantage of. NO MORE!....so that they will be more competitive for USA buyers. We are now a much bigger economy than China, and have substantially increased in size since the great 2016 Election. We are the “piggy bank” that everyone wants to raid and take advantage of. NO MORE!
We can make a deal with China tomorrow, before their companies start leaving so as not to lose USA business, but the last time we were close they wanted to renegotiate the deal. No way! We are in a much better position now than any deal we could have made. Will be taking in.....We can make a deal with China tomorrow, before their companies start leaving so as not to lose USA business, but the last time we were close they wanted to renegotiate the deal. No way! We are in a much better position now than any deal we could have made. Will be taking in.....
Billions of Dollars, and moving jobs back to the USA where they belong. Other countries are already negotiating with us because they don’t want this to happen to them. They must be a part of USA action. This should have been done by our leaders many years ago. Enjoy!Billions of Dollars, and moving jobs back to the USA where they belong. Other countries are already negotiating with us because they don’t want this to happen to them. They must be a part of USA action. This should have been done by our leaders many years ago. Enjoy!
Donald Trump’s claim that America’s steel industry is booming thank to his tariffs has been fact-checked, and found wanting.Donald Trump’s claim that America’s steel industry is booming thank to his tariffs has been fact-checked, and found wanting.
Here’s Lydia DePillis of CNN:Here’s Lydia DePillis of CNN:
Morning Trump tweet fact checking time! First of all, neither the auto nor the defense industries were asking to be saved from foreign steel. Defense manufacturers already buy most of their steel domestically and the tariffs just allowed US producers to raise prices. https://t.co/UxghnVvCkRMorning Trump tweet fact checking time! First of all, neither the auto nor the defense industries were asking to be saved from foreign steel. Defense manufacturers already buy most of their steel domestically and the tariffs just allowed US producers to raise prices. https://t.co/UxghnVvCkR
On the big and growing steel industry thing -- here's what that looks like. On an index basis, we're all the way back to where we were in 2012. https://t.co/RftwC27HLK pic.twitter.com/IExRvvTUaeOn the big and growing steel industry thing -- here's what that looks like. On an index basis, we're all the way back to where we were in 2012. https://t.co/RftwC27HLK pic.twitter.com/IExRvvTUae
Bloomberg’s Michael McDonough points out that the steel industry has lagged the wider US stock market of late:Bloomberg’s Michael McDonough points out that the steel industry has lagged the wider US stock market of late:
U.S. Steel Producers, Percent Change Since U.S. Presidential Election vs. the S&P 500 (pink line) pic.twitter.com/UqikihS08vU.S. Steel Producers, Percent Change Since U.S. Presidential Election vs. the S&P 500 (pink line) pic.twitter.com/UqikihS08v
Today’s jobs reports suggests Britain’s economy is unaffected by the US-China trade war...but the same can’t be said of Germany.Today’s jobs reports suggests Britain’s economy is unaffected by the US-China trade war...but the same can’t be said of Germany.
German economic confidence has fallen sharply, according to the monthly survey survey from the ZEW institute.German economic confidence has fallen sharply, according to the monthly survey survey from the ZEW institute.
Its economic sentiment index fell to minus 2.1 points this month, down from 3.1 in April, dashing hopes of a rise to 5.0. This index measures expectations of future economic performance.Its economic sentiment index fell to minus 2.1 points this month, down from 3.1 in April, dashing hopes of a rise to 5.0. This index measures expectations of future economic performance.
ZEW president Achim Wambach blamed the ongoing trade conflict between the world’s two biggest economies:ZEW president Achim Wambach blamed the ongoing trade conflict between the world’s two biggest economies:
“Financial market experts continue to expect restrained economic growth for the coming six months.“Financial market experts continue to expect restrained economic growth for the coming six months.
“The latest escalation in the trade conflict between the United States and China has once again increased uncertainty about German exports, and thereby a central factor for GDP growth.“The latest escalation in the trade conflict between the United States and China has once again increased uncertainty about German exports, and thereby a central factor for GDP growth.
ZEW also reports that firms are slightly less pessimistic about current economic conditions.ZEW also reports that firms are slightly less pessimistic about current economic conditions.
After seven months of decline, ZEW current conditions improved marginally in May. However, level still poins to a slight contraction in economic activity. Economic outlook weakened a bit. No sign yet of a clear turnaround in the German economy #macrobond pic.twitter.com/lPznhp3EGlAfter seven months of decline, ZEW current conditions improved marginally in May. However, level still poins to a slight contraction in economic activity. Economic outlook weakened a bit. No sign yet of a clear turnaround in the German economy #macrobond pic.twitter.com/lPznhp3EGl
The big picture is that Britain’s economy has created more jobs than expected over the last few years....but pay growth has lagged behind.The big picture is that Britain’s economy has created more jobs than expected over the last few years....but pay growth has lagged behind.
Brexit minister James Cleverly understandably highlights the first part:Brexit minister James Cleverly understandably highlights the first part:
As this graph shows, job growth has consistently exceeded projections. The next tasks are to keep wage growth ahead of inflation, make sure that jobs are stable, and that they are the kind of jobs that people and society value. A job is good, a good job is better. pic.twitter.com/5ZQRpgWO9aAs this graph shows, job growth has consistently exceeded projections. The next tasks are to keep wage growth ahead of inflation, make sure that jobs are stable, and that they are the kind of jobs that people and society value. A job is good, a good job is better. pic.twitter.com/5ZQRpgWO9a
The Resolution Foundation gives the other side of the story:The Resolution Foundation gives the other side of the story:
Nominal pay growth has tailed off slightly (3.3 per cent in the three months to March 2019, down from 3.4 percent) suggesting that wage pressure is, if anything, falling, and that real wage growth is now being supported by below-target inflation. pic.twitter.com/LL3Gm5laDgNominal pay growth has tailed off slightly (3.3 per cent in the three months to March 2019, down from 3.4 percent) suggesting that wage pressure is, if anything, falling, and that real wage growth is now being supported by below-target inflation. pic.twitter.com/LL3Gm5laDg
The public-private sector split on pay growth continues. There was lower pay growth in the public sector, while pay growth in the private sector held steady. pic.twitter.com/eS8hdPztB7The public-private sector split on pay growth continues. There was lower pay growth in the public sector, while pay growth in the private sector held steady. pic.twitter.com/eS8hdPztB7
The big picture is that 11 years on from the financial crisis, we are still earning £8 a week less (in real terms) than we did in 2008. pic.twitter.com/XDmjHwJ9omThe big picture is that 11 years on from the financial crisis, we are still earning £8 a week less (in real terms) than we did in 2008. pic.twitter.com/XDmjHwJ9om
Here’s the full story:Here’s the full story:
UK wage growth stalls despite record employmentUK wage growth stalls despite record employment
Disappointing news: Britain’s economy has become even less productive.Disappointing news: Britain’s economy has become even less productive.
Labour productivity – effectively the amount of output we produce -- fell by 0.2% in the last three months, the third consecutive quarterly fall.Labour productivity – effectively the amount of output we produce -- fell by 0.2% in the last three months, the third consecutive quarterly fall.
It’s a consequence of firms failing to invest in new machinery and equipment, and instead relying on recruiting more workers to cover the gaps.It’s a consequence of firms failing to invest in new machinery and equipment, and instead relying on recruiting more workers to cover the gaps.
Major downside of strong UK job growth is persistently weak labour productivity. Output per hour down 0.2% in q1 compared with previous year, third consecutive decline. https://t.co/BDri9lLIXP pic.twitter.com/ZoSuE65x9AMajor downside of strong UK job growth is persistently weak labour productivity. Output per hour down 0.2% in q1 compared with previous year, third consecutive decline. https://t.co/BDri9lLIXP pic.twitter.com/ZoSuE65x9A
John McDonnell MP, Labour’s Shadow Chancellor, blames the “do-nothing Government”.John McDonnell MP, Labour’s Shadow Chancellor, blames the “do-nothing Government”.
“With business investment also falling and wages still lower than a decade ago, we have an economy in a state of neglect, damaged by years of Tory mismanagement.“With business investment also falling and wages still lower than a decade ago, we have an economy in a state of neglect, damaged by years of Tory mismanagement.
This Government is falling apart, but it must not bring the economy down with it.”This Government is falling apart, but it must not bring the economy down with it.”