Dow Jones Drops below 25,000 Mark
After advancing by nearly 300 points on Monday, the Dow Jones Industrial Average fell 178.88 points on Tuesday to drop below 25,000 once more. The gain of the blue-chip index was short-lived. Investors reacted negatively to U.S. President Donald Trump’s comments that he was not satisfied with ongoing trade talks with China.
With the Dow Jones closing at 24,834.41, the S&P 500 Index and the Nasdaq Composite Index fell by -0.3% and -0.2% respectively. The discord developing between the negotiating teams might see the cancellation of the scheduled summit with North Korea on June 12.
China to Cut Tariffs on Imported Cars
Foreign automakers got a boost in the world’s largest market as China is cutting the tariffs it levies on imported cars. The Chinese Finance Ministry announced on Tuesday that starting July 1, import duties on passenger vehicles will be reduced from 25% to 15%.
The government is implementing Chinese President Xi Jinping’s earlier pledge. Only last month, U.S. President Donald Trump criticized China’s import duties. He said they’re far higher than the 2.5% the U. S. charges on imported cars.
Banks’ First Quarter Profits Soar 28%
During the first quarter of 2018, banks posted blockbuster earnings. According to the statistics published by the Federal Deposit Insurance Corporation (FDIC) on Tuesday, bank profits soared by 28% or $56 billion. Their earnings were boosted by U.S. President Donald Trump’s tax cuts, complemented by a healthy economy. It beat the prior record set just three quarters earlier.
The results came out hours before the House of Representatives is preparing to pass legislation that would roll back regulations on community banks and regional lenders. The aim is to prevent another financial crisis.
The banking industry has built up nearly $2 trillion of capital upon the urging of regulators. The enormous reserve can help weather the next storm. The FDIC report also showed that 70% of the nation’s 5,606 banks increased their bottom line during the last quarter. The money-losing banks comprise 3.9%.
Softbank Group to Sell Flipkart Stake to Walmart
The Softbank Group confirmed on Wednesday that it is selling its almost 20% stake in Flipkart to Walmart Inc. (WMT). Earlier this month, the American retail giant said it will pay $16 billion to the Indian e-commerce firm to acquire a 77% stake. It is also the largest-ever deal by the U.S. retailer.
SoftBank did not disclose terms of the sale although CEO Masayoshi Son said its investment in the Indian firm was worth around $4 billion. The group did not give the reason why they are cashing out.
ZTE Corp. Losses Due to U.S. Ban now at $3.1 Billion
A report by Bloomberg on Wednesday reveals that the losses of China’s ZTE Corp. due to the U.S. ban are now running to at least $3.1 billion. The company is reeling from Washington’s order to U.S. firms not to supply the Chinese telecom firm with microchips and other components.
ZTE is hoping the lifting of the ban will come soon. That is if the United States and China agrees on new trade agreements. The telecoms firm said they can “swing idled factories into action within hours” of lifting of the ban.