The threat of a new element – or should that be mineral, given Beijing’s rare earth threat – being introduced to the US-China trade war not so much suppressing investors’ appetites, but causing them to vomit up whatever rebounding gains were made at the end of last week.
With Brent Crude also getting in on the action – the black stuff fell 1.7%, dragging BP (LON:BP) and Shell (LON:RDSa) along with – the FTSE’s losses only intensified as the day went on. The UK index shed 100 points, returning it to 7170, its worst price in over a fortnight and only 40 or so points above the 2 month lows struck in mid-May.
The DAX and CAC fared no better. The German index slipped under 11900 for the first time in 2 weeks as it bled 130 points, while the French bourse barely clung on above 5200 as its losses widened to 1.3%.
Inevitably the Dow Jones, already troubled by falling 10-year Treasury yields, is going to add a bit more gore to trading when it opens this afternoon. The futures have the index falling another half a percent, sending it to a 3 and a half month, sub-25250 low. Given that Trump will be waking up soon, investors may be keeping an eye on their twitter feeds to see how the President responds to the rare earth speculation.
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