Investing.com - Here are the top five things you need to know in financial markets on Friday, August 31:
1. China warns U.S. that tariff threats won’t work
China's foreign ministry on Friday said that putting pressure on Beijing over trade won't work, as reports surfaced a day earlier that U.S. President Donald Trump planned to implement tariffs on $200 billion more in Chinese imports as soon as a public comment period on the plan ends next week.
Companies and members of the public have until September 6 to submit comments on the proposed duties.
People familiar with the matter told Bloomberg that Trump planned to move fast, implementing the levies as soon as that process was done.
Chinese Ministry of Commerce spokesman Gao Feng said Thursday that the U.S. should refrain from new tariffs, heeding the call of businesses and consumers in both countries.
2. EU warns it will respond to U.S. tariffs on cars
European Commission President Jean-Claude Juncker said Friday that he hoped a July "ceasefire agreement" with U.S. President Donald Trump to refrain from imposing car tariffs would prevail, but warned that the European Union would impose its own tariffs in retaliation.
Trump rejected an EU offer to eliminate tariffs on cars and said the EU's trade policies are "almost as bad as China".
Europe had offered to bring tariffs on cars down to zero if the U.S. did the same.
However, Trump insisted that the offer is “not good enough”, explaining that European consumer habits “are to buy their cars, not to buy our cars”.
Trump has threatened to raise all vehicle tariffs to 25% as compared to the current levy of 25% on pickups and light trucks but only 2.5% on passenger vehicles.
3. U.S.-Canada trade deal in focus as NAFTA deadline nears
Markets are watching closely watching trade negotiations between the U.S. and Canada as a Friday deadline to reach a deal nears.
Canadian Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer will meet Friday in Washington in a final round of talks which is anticipated to be the last ingredient to the reworking of the North America Free Trade Agreement.
After reaching a deal with Mexico on Monday, Trump indicated that Canada had through Friday to accept the new pact or be left out, threatening a new round of tariffs on Canadian auto exports otherwise.
“We’re doing really well,” Trump told reporters at the White House on Thursday. “They want to be part of the deal. And we gave ‘till Friday and I think we’re probably on track.”
Trump wants to notify the U.S. Congress on Friday of his intention to replace the 24-year old NAFTA.
4. U.S. stocks slip ahead of the holidays
U.S. stocks pointed to a slightly lower open on Friday as indices pulled back from record highs and investors watched trade developments. Thursday’s session broke a four day consecutive winning streak of record highs for both the S&P 500 and Nasdaq Composite. At 5:49 AM ET (9:49 GMT), the blue-chip Dow futures fell 29 points, or 0.11%, S&P 500 futures lost 3 points, or 0.11%, while the Nasdaq 100 futures slipped 5 points, or 0.06%.
With only the Chicago purchasing managers’ index for this month and the University of Michigan’s revision to August consumer sentiment on the docket, trading will likely be light ahead of the long weekend. Wall Street will be closed on Monday for the Labor Day holiday.
Elsewhere, European stocks were mostly lower as investors worried over trade developments with the U.S.
Earlier, Asian stocks closed lower amid the news that Trump wanted to move fast on the implementation of tariffs on $200 billion in Chinese goods.
5. Amazon passes Tesla as most shorted-stock in U.S.
Amazon.com (NASDAQ:AMZN) passed up Tesla Inc (NASDAQ:TSLA) to become the most shorted U.S. stock late Thursday, according to data from S3 Partners.
Tesla short interest in dollars, calculated using the number of shares sold short and the share price, stood at $9.93 billion, on Thursday, just shy of $9.95 billion for Amazon, the data showed.
The increase in Amazon shorts came as the company’s shares passed the $2,000 mark for the first time ever on Thursday, leaving it in touching distance of the $2,053 per share necessary to hit $1 trillion in market capitalization.
Tesla was also in the headlines as a filing with the U.S. Securities and Exchange Commission showed that BlackRock had voted in favor of ousting Elon Musk as chairman. The vote, which was defeated, would have not have affected Musk’s position as chief executive.