Global – Risk-off prevails
United States The US government increased tariffs on an additional $200 billion of Chinese goods from 10% to 25% with China responding with a tariff hike on $60 billion of US imports. Furthermore, the US administration imposed punitive measures on the Chinese tech-giant Huawei as well as threatening to impose a 5% tariff on all imports from Mexico. Once the Chinese trade talks broke down, these moves put the skids under the New York markets. The S&P 500 returned -6.4%.
Economic data remained positive with the Federal Reserve maintaining its dovish approach to interest rates and employment continued to rise. 263 000 new jobs were created resulting in total unemployment declining to 3.6%. Consumer confidence remained on the up climb from 129.2 in April to 134.1 in May. However, manufacturing slowed with May’s PMI coming in at 50.4 from April’s 50.6. The technology, industrial and energy sectors were the worst performers.