Stock market stay defensive on trade war threat

U.S stock market traded cautiously today at the open after President Trump hit China with trade tariff. The tariff will be imposed on up to $50 billion imported goods value. China responds by targetting 128 U.S product for potential import tariff. The U.S goods had import value of $3 billion in 2017 and under risk of 15-25% tariff. Soybeans particularly are the biggest target.

Meanwhile, the stock market found footing in the middle of the session and up more than 100 points on spending bill news. President Trump announces he signed a $1.3 trillion spending bill which will fund the government until the end of September.

Earlier, the President threatens to veto the $1.3 trillion bill as it did not include funding for his border wall and DACA recipient. However, he finally signs it and noted never will sign such a bill again.

Asian & European Stock market

Asian stock market dived today on escalated trade tension. Nikkei down 974.13 points (-4.51%) to 20,617.86, Shang Hai Composite down 110.39 points (-3.38%) to 3,153.09 and Australia ASX 200 down 116.50 points (-1.96%) to 5,820.70. European stock market also follows the downward path. DAX Germany down 1.77%, FTSE UK down 0.44%, and Euro STOXX 600 down 0.90%.

Other markets

Gold prices found an opportunity to shine under current high tension market on trade. The price jumped from $1,328 to as high as $1,349 and might continue its upward momentum in coming weeks.

Surprisingly, crude oil prices also found the upward path under the current sour market situation. The price jumped from $64.27 opening level and traded at $65.49 currently.

Although it is bullish for both instruments, there is chance reversal could happen if trade war tension loosen.