Wall Street Shaken by Cohn’s Resignation
The sudden resignation of Gary Cohn, the top economic adviser to U.S. President Donald Trump caused the S&P 500 index and the Dow Jones to drop by 82.76 and 1.32 points respectively on Wednesday. The tech-heavy Nasdaq managed to rise above the news and extended its win streak to a fourth session.
Trump might be signing the order to impose the metals tariffs this week that could lead to retaliatory measures from other countries. Many fear the prospects of an all-out trade war.
New Asia-Pacific Trade Agreement to be Signed
A landmark Asia-Pacific trade agreement is expected to be signed in Chile on Thursday to counter the protectionist stand by the United States. The ceremony will be attended by trade ministers from 11 countries. The EU and the IMF urged U.S. President Donald Trump not to make good his metals tariffs threat to prevent a trade war.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will bring down tariffs in countries that collectively amount to more than 13% of the global economy or equivalent to $10 trillion. The agreement will cover a market of nearly 500 million people. It becomes one of the globe’s three largest trade agreements.
The Trans-Pacific Partnership (TPP) had 12 original members but the U.S. withdrew from the group after Trump’s inauguration last year.
China Warns U.S. of Retaliatory Trade Action
China has been added to the countries that are warning the U.S. of consequences if the metal tariffs are imposed. Foreign Minister Wang Yi said on Thursday that a trade war with the U.S. would only harm both sides. However, China is prepared to impose punitive trade actions just in case.
The imposition of the tariffs on imported steel and imported aluminum might take effect this week. The White House said there could be a 30-day exemption for Canada, Mexico, and other countries based on national security.
Even prominent Republicans and business leaders are opposed to Trump’s plan citing the heavy impact of a trade war on the economy.
Cigna Nears Deal to Acquire Express Scripts
Another major healthcare deal is about to be completed as Cigna (CI) is almost close to sealing a deal to buy Express Scripts (ESRX). The cash-and-stock deal is worth $67 billion.
The offer by the insurer represents a premium of 31% of the pharmacy-benefit manager firm’s closing price of $73.42 on Wednesday. The price of ESRX climbed 16% to $85 in premarket trade.
Kroger to Face Investors
Kroger (KR), the largest grocery chain in the U.S. will be releasing their earnings report before the opening bell on Thursday. Investors are interested to find out more about the grocer’s reported talks with Chinese e-commerce giant Alibaba (BABA). Questions may also be raised about its new gun selling rules.
The company made headlines last week after announcing they will no longer sell guns and ammunition to customers under 21 years old. The chain sells weapons and ammunition at 45 Fred Meyer stores.