Trade war scares investors | Calamatta Cuschieri

Retreating markets, withdrawal from acquisitions and potential trade wars

U.S. markets slid on Thursday, pressured by worries of a potential trade war and the resignation of President Donald Trump’s lead attorney, which added another element of political uncertainty for investors. The Dow Jones Industrial Average dropped 723.42 points, or 2.9%, to end at 23,957.89 while the S&P 500 fell 68.24 points to 2,643.69, a decline of 2.5%.

European markets also traded lower, hit by worries about slowing economic growth and business activity within the Eurozone. London’s stock benchmark posted its lowest finish in more than a year Thursday, as blue-chips were clipped by renewed concerns about a potential global trade war. The broader market was also pressured by a decline in bank stocks. The biggest gainers of the day were Reckitt Benckiser Group PLC whose shares surged 4.8% and IG Group Holdings PLC, with shares climbing 2.9%.

GSK withdraws from Pfizer acquisition

GlaxoSmithKline has withdrawn from the race to buy Pfizer’s consumer healthcare business, the British company said on Friday, endangering an auction the U.S. drugmaker hoped would bring in as much as $20 billion. GSK was seen as the frontrunner to buy the assets, after Reckitt Benckiser quit the race late on Wednesday.

“While we will continue to review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation,” GSK Chief Executive Emma Walmsley said in a statement. Pfizer is the world’s fifth-largest player in consumer health with 2.5% of a market bolstered by aging populations and growing interest in health and wellness. GSK shares rose 3% as investor concerns about a potential dividend cut eased.

China – US trade tariffs

China unveiled tariffs on $3 billion of U.S. imports in response to steel and aluminum duties ordered by Trump earlier this month. The White House then declared a temporary exemption for the European Union and other nations on those levies, making the focus on China clear. Suppliers to Apple Inc. were among the hardest hit in Hong Kong and mainland markets.

The trade conflict between China and the U.S. escalated, with Beijing announcing its first retaliation against metals levies hours after President Donald Trump outlined fresh tariffs on $50 billion of Chinese imports and pledged there’s more on the way. Though Beijing’s actions so far are seen by analysts as measured, there may be more to come.

Disclaimer

This article was issued by Peter Petrov, Junior Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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