Tariffs and trade talk | Calamatta Cuschieri

US equities rose sharply last week, amid hopes for better trade relations and signs of stabilisation in Turkey’s currency market. US stocks closed higher for a third session on Monday, as a pair of billion-dollar deals ensured confidence that the US economy maintains a steady expansion. The Dow Jones Industrial Average rose 0.4 percent to finish at 25,768.69, with Nike Inc. rising to hit a 52-week high. The S&P500 index climbed 0.2 percent to 2,857.05, led by materials and energy sectors. The Nasdaq Composite Index reversed earlier losses to advance to 7.821.01.

European shares steadied as caution settled in prior to trade talks between the US and China later this week, though a weaker dollar boosted shares in international earners and commodities sectors. The pan-European STOXX 600 index was flat in percentage terms; Germany’s DAX rose 0.2 percent; and Britain’s FTSE 100 remained steady.

Oil giant Total pulls out of Iran and giant gas project

French oil giant Total has left Iran and abandoned its deal to develop a natural gas field in the country, Iran’s oil minister announced Monday. Total had already signaled it could pull out of the Islamic republic and its aim to develop part of the world’s largest gas field, after the US said it would re-impose sanctions on the country upon pulling out of the 2015 nuclear deal in May.

The first series of sanctions were reinstated in early August, targeting the automotive sector, issuance of debt, and metals trade. More are to come in November, aimed at the country’s oil sector, shipping industry, and financial institutions. Foreign companies like Total could face secondary sanctions for doing business in the country, prompting several to pull out, including Peugeot, Boeing, and Siemens.

US Tariff worries over Huawei’s solar electronics launch

Huawei Technology Co’s planned US launch of a solar-panel control is expected to collide with new Trump administration tariffs on Chinese electronics. Best known for its telecommunications equipment, Huawei has developed low-cost solar inverters which convert, manage, and monitor energy produced by solar panels for home use.

The product was planned for before the end of summer, a year after its original target. Analysts had expected it to knock $100-$200 off current market prices of similar devices. However, a 25 percent tariff on Chinese electronics would impact Huawei’s price advantage and may have stalled talks with US installers and distributors. Huawei will have to reduce margins and raise prices, potentially benefitting rival producers boosting manufacturing outside China.

President Trump on China trade talks

The US President does not expect much progress from trade talks with China this week. In an interview, Trump stated he had no time frame within which he must end the trade dispute. The talks this week are in line with new US tariffs on $16 billion of Chinese goods taking effect on Thursday, alongside the retaliatory tariffs from Beijing on an equal amount of goods.

Trump believes “China’s done too well for too long … They dealt with people that, frankly, didn’t know what they were doing, to allow us to get into this position.” Trump also accused China of manipulating its currency to make up for tariffs imposed by Washington. This week’s meetings are the first formal trade talks since June.

Disclaimer: This article was issued by Lauriann Azzopardi, junior investment advisor at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article are 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.