Today's stock market: Shares drop despite job numbers, US-China trade negotiations-2018-11-02


Despite great news for jobs in October and we are talking about a possible US-China trade deal in work, US shares fell back on Friday great loss from Apple shrinking technology companies are down and rising interest rates hit high-dividend companies.

The iPhone maker, the largest technology company in the world, forecast a slight increase in revenue Thursday night and said it will stop revealing quarterly phone sales Apple's shares fell by 6.6%.

Stocks had risen over the past three days and were still at a rate for a big weekly profit after sliding in October at their worst monthly loss in seven years. But positive news on Friday seemed to have little effect on traders. The federal government said employers added 250,000 jobs in October, far more than analysts had expected, while hourly wages rose 3.1 percent at most by early 2009.

In addition, President Donald Trump said on Thursday spoke with Xi Jinping of China and that trade talks are "moving well", boosting Wall Street's hopes to resolve a deeper conflict that threatens tariffs and other hundreds of millions of dollars worth of business activity between the two economic powers.

The Dow fell 110 points, or 0.4 percent, to close at 25,271. The S & P 500 finished 0.6% a day, and Nasdaq, which has a high concentration of technology companies, lost 1%. Russell 2000 of the shares of smaller companies adds 0.2%.

The S & P 500 rose approximately 2% this week after strong gains over the past three days, but it would have to raise another 7.9 percent to match the high of all seasons that reached September 20.

A promising start

Many investors had started their day with optimism, with foreign stocks rising sharply after Mr Trump announced that he had asked US officials to start drafting a possible new trade agreement with China while the president is seeking to reaches a new pact of the 20th summit in Argentina later in November, Bloomberg News reported.

Commercial trends have weighted the climate of investors because the Trump government prices on Chinese imports have triggered more than 100 US companies traded in the United Kingdom to reveal how much they could be hit by import duties, said Liz Ann Sonders, lead strategy investments for Charles Schwab.

"Companies say that" this bite and how it is, "he said." They start talking about margins and whether they are going to spend on consumers. "

Mr Trump did not give details of his talks with Xi, but the trading arrangements took place a few months and investors feel nervous about the prospect of huge increases in tariffs, with US markets falling by almost 10% from their highs in August.

A spokesman for the Chinese Foreign Ministry told reporters that the talk was positive and that the two leaders were optimistic about resolving the dispute over trade practices and technology development that led both sides to impose tariffs on the other's exports. Meanwhile, Chinese state media reported that Xi has promised tax cuts and other aid to Chinese entrepreneurs in a new effort to revitalize the Chinese-dominated economy.

Not So Fast: Continued Unrest?

However, until there is clarity in a trade agreement, investors may continue to worry, said CityIndex analyst Fiona Cincotta.

"An official meeting between Trump and its Chinese counterpart will take place later this month at the G-20 Summit and is likely to introduce volatility in trade until the two sides reach a formal trade deal," he writes in research note.

October brought a sudden, hitting stop to a milestone that sets in September and broke a six-month winning streak for the benchmark S & P 500. Last month is the worst month for the market since September 2011.

Investors may be on their toes until the trade dispute is resolved. Mr Trump "was known to be hot and cold before and during major negotiations and a positive comment today could easily be turned into a less flattering tomorrow," Cincotta noted.

Other analysts were completely skeptical about the prospects of a China trade deal. "President Trump's request for his office to draw the outline of an" agreement "with China is likely an attempt to support a market rally that will be headed to the midterm elections on November 6 and not a sign of an imminent development," O Allen argued in a note Friday.

Jobs, jobs, jobs

The Ministry of Labor stated that US employers continued to add jobs to a quick clip in October, without showing that recruitment is slowing down. The percentage of Americans with jobs is at the highest level since January 2009 and the monthly increase in earnings was also the highest since then. Together with high consumer confidence, all these indications are beneficial for economic growth and consumer spending in the coming months.

Bonds declined, with returns being significantly higher. The yield on the 10-year government bond increased to 3.22% from 3.14%. A jump in interest rates last month triggered the recession, but investors on Friday did not seem so worried about the rise. "It's clearly a good report," said David Lefkowitz, America's senior strategic investor in UBS Global Wealth Management.

The number of fees, although high, was what investors expected, Lefkowitz said. This is important because investors are still sensitive to indications that inflation could overcome, forcing the Federal Reserve to show a more aggressive interest rate hike. If inflation is rising moderately, as it did in October, this is not likely.

Apple cores

Apple's sales in the last quarter and its estimates for the holiday season were also disappointed by experts. The technology giant also surprised investors saying they would no longer disclose the number of iPhones they sell each quarter. Apple was unique among the big smartphone makers saying how many phones it sold and what was the average price. Apple gains most of its revenue from iPhone sales and has recently boosted its profits by selling higher-priced models.

The unexpected change raised suspicion that Apple might be trying to catch up with a decline in the popularity of the phone. The company says quarterly figures and prices did not necessarily show investors how robust their work was.