Reading latest news titles one would think it is all Doom and Gloom for Dow Jones Industrial Average (INDEXDJX:DJI) today.
Just read these two:
–Global stocks dive after China sets up a fresh showdown with Trump and shocks investors by announcing a new Hong Kong security law
-Dow Jones Falls 175 Points, As Rising U.S.-China Tension Outweighs Coronavirus Vaccine Optimism; Alibaba Dives 5% On Earnings
A lot of diving in these titles, but Dow lost only 9 points today.
While the global economy is suffering from the corona pandemic, the Chinese leadership is creating new tensions with the United States. Good news, however, comes from the ECB.
The European Central Bank (ECB) said it was ready to expand its emergency bond purchase program to deal with the corona crisis (PEPP) in June if necessary.
According to economists, the central bank will decide at its next meeting in June to increase the size of the PEPP program by EUR 500 billion.
In New York, investors stayed under cover. The reason was the new tensions between the USA and China. The long weekend – in the U.S. is not traded on Monday due to Memorial Day – also made investors act cautiously.
The Chinese government had terrified investors in the morning. Prime Minister Li Keqiang announced before Beijing’s delegates gathered at the “People’s Congress” that Hong Kong’s powers would be expanded. The project includes the possibility of relocating Chinese police officers to the special economic zone, which has not been possible until now. It would be the end of the “one country, two systems” principle.
The project caused upset worldwide. Secretary of State Mike Pompeo threatened that the US could cancel its special economic treatment in Hong Kong if the People’s Republic implemented its plans. “The United States urges Beijing to rethink its catastrophic proposal, honor its international obligations, and respect Hong Kong’s high level of autonomy, democratic institutions, and civil liberties, which are critical to maintaining its special status under US law.”
Oil prices came under considerable pressure before the weekend. Traders cited growth concerns about China as the main reason.
All in all, there is a long weekend ahead of us and Dow Jones Industrial Average Index today did not move a bit. As if this day never happened.