SINGAPORE/NEW YORK (Reuters) - The United States and China slapped tit-for-tat duties on $34 billion worth of each other’s imports on Friday, with Beijing accusing Washington of triggering the “largest-scale trade war” as the world’s two biggest economies sharply escalated their conflict.
MARKET REACTION:
The Shanghai Composite index, which recently tumbled into correction territory, ended up 0.5 percent.
U.S. S&P mini futures were last down 0.05 percent.
COMMENTARY:
QUINCY KROSBY, CHIEF MARKET STRATEGIST AT PRUDENTIAL FINANCIAL:
“The numbers today that have been implemented by the U.S. and the Chinese, by themselves are not that large and it was expected. The market had a chance to discount today’s actions. The question for the market is how far does this go.”
“This market is now going to wait for the next phase and hope there’s a resumption in negotiations.”
“The market has decided which areas are clear and which are more vulnerable. There are pockets that remain vulnerable. Many of the big industrial names and automobiles. This is broader than just China. It also includes the EU.”
“The market is waiting to see what is next. They’ll discount what they know. The question is how protracted and enduring this can be. You can say small and mid-cap stocks are a pocket of safety but at some point they become overvalued.”
“You’ll look for more U.S. focused companies for the time being. You’re going to focus on what you know and what you don’t know. But you have to look at valuation.”
“We’ve see allocations toward the treasury market. That’s made utilities attractive again.
