• Major indices in Europe close sharply lower
• Twitter labels Trump tweet as 'glorifying violence'
Moods on the stock markets are not the best during the last session of the month. When the situation is relatively controlled (slow spread of the virus), the largest economies in the world have returned to mutual skirmishes. This time it is about Hong Kong, although it is known that the key to the conflict are trade issues between the two countries. Donald Trump is expected to present tonight what the United States intends to do about China.
Protests in Hong Kong began about a year ago. China wants to reduce its autonomy and at this point wants to push through a law that would allow the extradition of citizens from this "city-state" to China. Theoretically, China agreed that by 2050, they would provide the same freedoms in Hong Kong as they were when Britain left the colony. The changes that China wants to introduce do not please the whole world. The United States has previously opposed these activities in Hong Kong, but the First Phase trade agreement has probably silenced the United States somewhat. What will happen when Trump loses its electorate, China is the seed of a pandemic that led to the global crisis, and at the same time the world's second economy is not complying with the agreement? This basically gives Trump a free hand to react. However, financial markets do not like this, because investors are not sure what actions the American president may choose. Perhaps more trade restrictions will be introduced, which will probably concern goods which are important for both economies, such as electronics and technology. We know well that technology companies have been responsible for the recent stock rally. Will Trump decide to take decisive action against China? Everything will probably be clear after the upcoming weekend. Therefore, theoretically, large price gaps can be expected during Monday's opening.
The major European indices are closing the day lower amid concerns that President Trump's conference can raise trade tensions with Beijing and slow the global economic recovery. German DAX dropped1.6%, France's CAC40 declined1.5%, UK's FTSE 100, finished 2.5% lower. However for the week, the major indices closed sharply higher. German DAX jumped 4.7%, France's CAC 40 added 6.13%, UK's FTSE 100 climbed 1.2%.
Wall Street is swinging between gains and losses during today's session. Earlier Fed Chair Jerome Powell announced, during a conversation with Princeton economist Alan Blinder, that FED is strongly committed to use its tools to support the US economy as the present coronavirus crisis is an emergency of a nature we haven’t seen before. Head of Fed also mentioned that the central bank is ‘days away’ from making the first loans in the Main Street lending facility programme although it is very challenging because of the wide diversity of companies.
Today Twitter (TWTR.US) limited the reach of a second tweet from President Donald Trump, as the White House and its allies sought to escalate their feud with the social media company. This decision came after President Trump threatened, via Twitter, to stop looters in Minneapolis with deadly military force, after that city weathered a third night of arson and rioting over the police killing of an unarmed black man. Twitter announced that President Donald Trump and the White House's official Twitter account have violated its rule against glorifying violence and has affixed a warning label to tweets on both, marking the first time such action has been taken against the accounts. Yesterday, President Trump signed the order targeting social media companies that gives regulators the power to pursue legal actions against companies such as Facebook and Twitter for the way they police content on their sites.
On the economic front, the Commerce Department said consumer spending slid a record 13.6% in April after dropping 6.9% in March. Personal income increased 10.5% in April, helped by government stimulus payments. During today’s session Dow Jones fell 0.79 %, S&P 500 is losing 0.45 % and Nasdaq is trading 0.45 % higher.
USDCAD downward move was halted near the 1.3709 support level and the pair pulled back. If the current sentiment prevails price might test the key resistance level at 1.39 which previously acted as strong support. Source:xStation5