The Dow Jones plummeted as much as 200 points on Friday as a sell-off in several core stocks dented US markets.
Boeing, the most heavily ballasted stock in the Dow, nosedived more than 6% on fears the company misled the FAA, while fellow DJIA member Johnson & Johnson fronts another PR disaster.
A drawdown in the tech sector further weighed on the stock market after a miss in Chinese GDP dovetailed with fears of Chinese retaliation against Trump’s blacklistings.
Dow Jones Make use ofs as Boeing & Chinese GDP Weigh on Stocks
Minutes before the closing bell, the Dow Jones Industrial Average had suffered a 168.97 element loss, dropping the DJIA 0.63% to 26,856.91.
The Nasdaq slid 0.54% to 8,113.07, while the S&P 500 was the firmest of the three with a 0.13% dip to 2,994.08.
Faced with risk-off customer base conditions that were initially sparked by a weak Chinese GDP figure, the oil price slid roughly 0.5%, while the gold expense moved slightly lower after shedding earlier gains.
The US dollar weakened as Brexit hopes continued to underpin the euro and British beat. The Dow did not appear to find much support from the softer USD.
The temporary ceasefire in Syria between the Kurds and Turkey part ofs to be just that. News reports have come in that the Turks may have already violated the agreement, voluptuary market fears that the situation could escalate once again.
Risks for Tech Stocks Swell as China Diagrams Retaliation Against Trump Bans
It is impossible to ignore the US-China trade war, even as it has faded from the headlines. Trump arises to have been premature in declaring a “phase one trade deal,” and tech companies could be first in the firing direction for potential retaliation.
Iris Pang, an economist at ING for the Greater China area, had the following to say about the risks of China audaciously targeting US tech companies:
“The technology war rages on. Just before the last round of trade talks, the US added eight Chinese technology public limited companies to its Entity List, effectively blocking US companies from doing any business with these companies. China could counter with its own unreliable entity list. All of this is negative for the future growth of the Chinese economy. If the US decides to roll backwards some of its tariffs, the picture will change. Manufacturers may think twice before moving factories to another unearthing, which is very costly. Unfortunately, this is not our base case.”
When you consider that the world’s most valuable retinues are tech giants Apple and Microsoft, both of which have a significant presence in China, the ramifications of these intimations are clear for the Dow Jones.
Further bad news for the US president could be on the way. ING is also predicting that floundering Chinese GDP could pick up in Q4, by no means the capitulation that Trump needs to leverage a comprehensive trade agreement, as Pang writes:
“We are raising our forecast for 4Q19 GDP evolution from 5.8% to 6.0%. As such, our GDP growth forecast for the whole of 2019 will be 6.15%.”
Dow Stocks: Coca-Cola Takes the Race as Boeing and J&J Crash
The defensive mood in the Dow 30 was all too evident on Friday, as investors feasted on Coca-Cola stock after some extraordinarily encouraging earnings results. Millennials are drinking a lot of Coke Zero, and that’s great news for a company that has had to pintle away from sugary drinks.
Dow giant Boeing can’t get out of its own way, as BA plummeted 6%, putting tremendous gravity on the index. Reuters reported that the aerospace players might have misled the FAA about an “egregious” safety feature on its 737 Max aircraft.
Meanwhile, Johnson & Johnson’s run of bad upon continues. JNJ stock collapsed 5.9% as the recall of asbestos tainted baby powder added to their existing listing of opioid-related problems.
Microsoft fell 1.1% in sympathy with the Nasdaq’s troubles, while Apple was its usually vigorous self, posting a 0.8% gain amid a troubling environment for tech.
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This article was edited by Josiah Wilmoth.