Wall Street Bucks Escalating Trade War
Wall Street is taking the escalating trade war in stride as U.S. stocks closed mostly higher on Wednesday. However, tech stocks weakened due to concerns over tariffs imposed on tech products. Investors continue to focus on improving economic fundamentals.
The Dow Jones Industrial Average climbed 158.80 points (+0.61%) to close less than 1% from its all-time closing high. The blue-chip benchmark’s last record was 163 trading days ago. According to the Dow Jones Data Group, it was the longest such stretch since a period of 288 days that happened between May 2015 and July 2016.
The S&P 500 Index added 3.64 points (+0.13%) and is now within 0.3% of its record. Financials were the best-performing stocks as it rallied +1.8%. The Nasdaq Composite Index shed 6.07 points (-0.08%) to close at 7,950.04. Meanwhile, the 10-year Treasury yield rose to 3.081% which is its highest since May 17.
China Wants U.S. to Show Correct Behavior in Trade Moves
China’s Commerce ministry spokesman Gao Feng said at a weekly news briefing on Thursday in Beijing that the country has been forced to take retaliatory measures against the United States and to protect its interests
However, China is hoping the U.S. will show sincerity and take steps to correct its behavior. Both countries struck new tariffs on each other’s goods this week in an escalating trade war. China is also studying targeted measures to help foreign firms in China counter the effects of the latest U.S. tariffs.
Jack Ma’s Pledge to Create 1 Million U.S. Jobs Fizzle Out
Chinese news agency Xinhua reported on Wednesday that Alibaba’s (BABA) Chairman Jack Ma can no longer fulfill his promise to create 1 million jobs in the U.S. His pledge has fizzled out because of the trade war.
Two years ago, Ma presented to U.S. President Donald Trump the Chinese e-commerce giant’s plan to bring one million small U.S. businesses onto its platform to sell to Chinese consumers. Jack Ma said his commitment was based on friendly China-U.S. cooperation and the rational and objective premise of bilateral trade. He told Xinhua, “The current situation has already destroyed the original premise. There is no way to deliver the promise.” Ma has already warned that the trade war between the world’s two largest economies could last decades.
Nike’s Sales Soar Despite Controversial Ad
Nike Inc.’s (NKE) controversial ad campaign featuring former NFL player Colin Kaepernick did more good than harm. Based on data from Thomson Reuters Proprietary Research, the world’s largest sportswear maker has sold out 61% more merchandise since the said ad came out earlier this month.
The ad where Kaepernick appeared was released on Labor Day weekend and immediately sparked demands for a boycott of the company’s products. However, far more items were sold between September 3 and September 13 than in the 10-day period before the ad came out.
The research also showed that Nike discounted fewer products in the 10-day period after the ad and saw Kaepernick women’s jersey sell out on September 17. Shares of Nike are up +34.98% year-to-date.
Tilray Surges After DEA Approves Pot Importation
After soaring 28.9% on Tuesday, shares of Tilray Inc. (TLRY) surged 38.11% from $154.98 to $214.05 on Wednesday. The stock touched a high of $300.00 at one point during trading. Since debuting in Wall Street last July, TLRY has seen strong upward momentum.
TLRY’s rise was due to the cannabis company’s announcement that it has secured DEA approval to import pot to the U.S for medical research. Tilray will work with the University of California San Diego Center for Medicinal Cannabis Research to study the efficacy of marijuana for a neurological disorder.
Tilray CEO Brendan Kennedy said, “Clinical trials build a halo around the brand. They inspire confidence and trust with physicians and regulators around the world and they give us data and information to talk to pharmacists and physicians that they just can’t obtain from our competitors.”