Skip Header

On 13 May 2019 - Global shares slide sharply as China announces counter-tariffs

Anne D Picker

Anne D Picker - Econoday

Yuan drops again; no new trade negotiations set.

US markets

Sharply lower was Monday's session after China announced its own tariffs following last week's collapse of trade talks. The Dow was down all day and ended near its lows with a 2.4 percent decline. The Nasdaq lost 3.4 percent.

President Trump urged no retaliation against increased US tariffs but China's Finance Ministry reacted by increasing existing tariffs on $60 billion of US goods including food and machinery. Negotiations between the trading partners are expected to resume but no schedule has been set, though President Trump did say during the session that he will be meeting Xi Jinping at the June G-20 in Japan.

The president also said that China will "largely" be bearing the cost of higher tariffs and that US consumers won't be hurt, though his economic advisor Larry Kudlow told the press over the weekend that US businesses will indeed be affected by the tariffs and that US consumers will ultimately have to share in footing the bill.

Apple, which has a very significant presence in China, fell very sharply. Other major exporters including Caterpillar and Boeing also fell. There were no major economic data posted in the session. Uber Technologies, which fell on Friday's initial public offering, extended its losses in Monday's session.

These data reflect observations at 4:00 PM US ET. Dated Brent spot crude was down US$0.91 to $69.88 while gold was US$12.90 higher at $1,300.30. The US dollar rose against the yuan, the Australian dollar, the Canadian dollar and the pound; it was little changed against the euro, and it fell against the yen and the Swiss franc. The yield on the US Treasury 30-year bond fell 5 basis points to 2.84 percent while the yield on the 10-year note also fell 7 basis points to 2.40 percent.

European markets

European stock markets held steady in early trading but then gave way to the heavy selling in the US. The DAX fell 1.5 percent with the CAC down 1.2 percent. Year-to-date gains for both remain in the low double digits but for the FTSE, which fell 0.5 percent on the day, the year-to-date gain is in the mid-single digits at 6.5 percent.

Exporters were among the heaviest losers including Daimler AG. Vodafone PLC fell sharply on reports it will cut its dividend to fund 5G networks in Italy and Germany.

Citing weakness in its auto and consumer electronics markets, Victrex PLC also fell sharply. Germany's Thyssenkrupp also fell sharply after rising sharply on Friday. There were no major economic releases in the session.

Asia Pacific Markets

Asian stocks fell Monday on worries that the US-China trade dispute is worsening and negotiations are deadlocked. President Trump threatened tariffs on $300 billion in additional Chinese goods if there is no trade pact in one month's time. Chinese officials were quoted saying they had not reneged on commitments in the trade talks, as the U.S. has charged, and that they would not accept an agreement that is not in China's interests. The renewed selloff Monday followed a rebound in most Asian markets Friday on hopes for progress in the trade talks.

As the losses resumed Monday, Asian currencies dropped in a flight from risk into dollars and yen, led by losses in the Chinese yuan and Korean won. The Chinese currency fell 1% to 6.90 per dollar, a four-month low. The yuan is threatening to fall below 7.0 per dollar, which could trigger heavy selling and add to concerns about Chinese financial stability.

China's Shanghai composite fell 1.2 percent, with declines led by the financial sector. Singapore's Straits Times index fell 1.2 percent, led by DBS Group, down 2 percent.

Korea's KOSPI fell 1.4 percent. Japan's Nikkei 225 fell 0.7 percent, with shipping companies and machine tool makers suffering most. Australia's All Ordinaries fell 0.2 percent, with gains in healthcare and gold shares helping to  offset weakness in financials.

In economic news, Chinese total vehicle sales dropped 14.6 percent in April from a year ago, much worse than the 5 percent drop markets expected, and are down 12 percent for the first four months of the year. Sales of energy-efficient vehicles rose 18 percent in April, and are up 60 percent for the year, in part reflecting tax cuts to spur sales. 
Chinese industrial production, retail sales and house price data are due on Wednesday, and the big question is whether government stimulus efforts are working.

Japan's leading economic indicator fell to 96.3 in March from 97.1 in February, below the 96.5 figure expected. The coincident indicator slipped to 99.6 from 100.5, a bit better than the 99 expected but the market view suggests Japan's economy is turning down in response to a worsening global environment.

Looking forward

Asia will be light with India wholesale prices set for release Tuesday. Europe Tuesday will open with German CPI followed by producer & import prices out of Switzerland, the UK labour market report, Germany's ZEW survey and Eurozone industrial production. US data will include import & export prices.

Global Stock Markets



May 13 2019

Daily Change

% Change Daily

North America

United States











S&P 500





S&P/TSX Comp






FTSE 100




















Ibex 35





OMX Stockholm 30











All Ordinaries





Nikkei 225









Hong Kong

Hang Seng




S. Korea











Shanghai Comp










Sensex 30




*Markets closed
Data Source - Haver Analytics

Note: all releases are listed in local time.

Important Information

Econoday Inc. is a US company that provides financial commentary and indicators to industry professionals. All information provided and views expressed are those of Econoday. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only. Past performance is not a reliable indicator of future results. The value of investments can go down as well as up and investors may not get back the amount invested.