US equities did not fare well in the shortened holiday week to open September with the Nasdaq posting its largest weekly loss in over 5-months. The tech-heavy index took a beating after trading resumed Tuesday, September 4th. The discourse between US Senators and officials of Twitter and Facebook generated some early losses for tech on Wednesday. Thursday saw a continuation with semi-conductors and chip-makers falling under threat. Friday piled on losses with trade war uncertainty controlling the headlines. Together, the initial losses in specific areas were enough to drag down the broader index with giants like Apple and Amazon following suit. The Nasdaq ended last week down -2.58%.
Nasdaq Price Chart 1-Hour Time Frame, September 4th – September 10th
The S&P 500 and Dow also shared in the pain but to a lesser extent because of their lower exposure to tech. Still, the week saw the S&P 500 decline -1.04% while the Dow shed a modest -0.19%. Collectively, the poor performance of US equities is more likely attributable to trade war developments and uncertainty.
Trade Wars Reach a Deadline
With the public comment period over for the proposed $200 billion in tariffs on China, the US is likely set to announce its decision on their implementation in the near future. If they decide to move forward with the tariffs it would signal a steep escalation in the conflict with China and have serious ramifications on equities in the US and globally. Already we can see some rising demand in traditional safe havens like the Franc, a currency which enjoys dissociation from the trade war.
Friday saw the risk of trade wars grow as President Trump threatened to lobby an additional $267 billion of tariffs on China. The move rattled markets and sent equities off their Friday gains. Furthermore, President Trump warned Japan should look to make a trade deal with the United States in order to reduce the large trade surplus Japan has.
