U.S. equity indexes opened mixed on Monday on some unexpectedly strong Chinese manufacturing numbers despite President Donald Trump’s decision to reinstate tariffs on steel and aluminum imports from Brazil and Argentina.
The Dow Jones Industrial Average gained 18.87 points to 28,070.28 while the S&P 500 fell 1.06 points to 3,139.92 and the Nasdaq Composite Index dropped 15.19 points to 8,650.28.
China has insisted that any phase one trade deal with the U.S, is contingent on a rollback of U.S. tariffs. Axios reported renewed tensions over Hong Kong protests will probably delay any deal until the end of the year.
In retaliation for President Donald Trump signing a bill that supports Hong Kong pro-democracy protesters, China has threatened to sanction some U.S. rights organizations and prevent U.S. Navy warships from visiting Hong Kong,
Hua Chunying, a spokeswoman for the Chinese Foreign Ministry said on Monday that U.S. groups facing sanctions include the National Endowment for Democracy, Human Rights Watch and Freedom House.
“China urges the U.S. side to correct its mistakes and stop any words and deeds that interfere in Hong Kong affairs and China’s internal politics,” Hua told reporters in Beijing. “China will take further necessary actions in light of the development of the situation to firmly safeguard Hong Kong’s stability and prosperity, as well as China’s sovereignty, security and development interests.”
Zhu Feng, the dean of the Institute of International Relations at Nanjing University, called these countermeasures by China “very tough and unprecedented.”
But China received some good news on the economic front.
China’s manufacturing purchasing managers index for November came in unexpectedly high at 50.2, versus expectations of a reading of 49.5. Readings above 50 denote growth, while below signals contraction.
“This improvement in the manufacturing [purchasing managers index] is important because we can say with more certainty, than at the beginning of the year, that China’s macro outlook is indeed stabilizing,” said Aninda Mitra, senior sovereign analyst at BNY Mellon Investment Management.
However, Trump warned he will restore tariffs on all steel and aluminum imports from Brazil and Argentina, accusing those nations of “presiding over a massive devaluation of their currencies, which is not good for our farmers.”
Overnight in Asia, Hong Kong’s Hang Seng climbed 0.37% while Japan’s Nikkei 225 surged 1.01% and China’s Shanghai Composite edged up 0.02%
European markets were all lower with the FTSE 100 down 017% while Germany’s DAX fell 0.71% and France’s CAC 40 dropped 0.83%.
Crude oil futures surged 2.25% to $56.41 per barrel and Brent crude gained 1.92% at $61.85. Gold futures dropped 0.56%.
The euro was up 0.25% to $1.045 while the pound sterling rose was flat at $1.2931.