Wait and See. All three major U.S. stock indexes closed with minor losses on Thursday, as a U.S.-China trade deal looks more complicated. A debate Wednesday night among Democratic presidential hopefuls didn’t move the market by much. TD Ameritrade stock (ticker: AMTD) soared on a report that rival Charles Schwab (SCHW) wants to buy the discount broker. Tiffany stock (TIF) rose on reports that LVMH Moët Hennessy Louis Vuitton has increased its bid to take over the jeweler. Macy’s stock (M) dropped after the department store cut full-year guidance. And Tesla (TSLA) is set to debut its first pickup truck Thursday evening in Los Angeles. In today’s After the Bell, we...
- wonder if consumers will see big price jumps this Christmas thanks to the coming round of tariffs;
- look at the latest forecast for global economy in 2020;
- and check on one better-than-expected manufacturing indicator.
No Apple Tariffs?
Stocks went slightly lower on Thursday, as trade-deal optimism remained cautious. The Dow Jones Industrial Average lost 54.80 points, or 0.20%, to close at 27,766.29. The S&P 500 is down 4.92 points, or 0.16%, to finish at 3103.54 and the Nasdaq Composite fell 20.52 points, or 0.24%, to finish at 8506.21.
Talks for a “phase one” trade deal—announced weeks ago—still hasn’t shown much progress. There are plenty of roadblocks between the two countries: Tariff rollbacks, agriculture purchases, and the U.S. attitude toward Hong Kong’s antigovernment protests. Still, Chinese Vice Premier He Liu said he is “cautiously optimistic” about a deal and invited his U.S. counterparts to China for a new round of face-to-face talks.
During a Wednesday visit to one of Apple’s (AAPL) facilities in Texas, President Donald Trump said China’s not stepping up in the trade negotiations to a level that he wants. “I haven’t wanted to do it yet,” said Trump.
The president also said he was looking at exempting Apple from a coming round of China tariffs that could boost iPhone prices sharply for U.S. consumers right around the holiday shopping season.
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South Korea-based Samsung Electronics —one of Apple’s major competitors—has moved its smartphone production out of China already and won’t be subject to the U.S. tariffs on Chinese imports. But a lot of Apple’s production remains in China. If iPhones are charged with the new tariffs, it would give Samsung a big price advantage over Apple. “We have to treat Apple on a somewhat similar basis as we treat Samsung,” said Trump, who was paired with Apple CEO Tim Cook during the excursion.
The Organization for Economic Cooperation and Development warned in a Thursday report that it expects the global output of goods and services to increase in 2019 at the slowest pace since the financial crisis, and doesn’t expect growth to pick up next year. The OECD trimmed its 2020 growth forecast to 2.9% from 3.0% in September.
Still, the U.S. economy is starting to see signs that the worst is behind us. The Philadelphia Fed manufacturing index came in at 10.4 for November, well above the consensus estimate, and topped October’s reading of 5.6. Any reading above zero indicates improving conditions.
The index is still well below the 21.8 level of July, but some economists are expecting the slowdown to bottom out and recover in December.
Write to Evie Liu at evie.liu@barrons.com
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Dow Jones Industrial Average Fell as the China Trade Deal Is All Talk - Barron's
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