Possible GDP contraction drives the global stocks down
Global stocks edged lower on May 1. The markets reacted negatively to the underwhelming data on the US economy, as well as President Trump’s announcement of the possible new tariffs on Chinese trade.
MSCI’s world index dropped 0.5%, stopping a long streak of gains of this week.
On April 30 President Trump expressed concerns about China’s responsibility for the pandemic, as well as the future of the recent trade compromise. As the economy has transformed since negotiations, the president warned that new tariffs are possible as a way to retaliate.
Last week 3.84 million of US initial jobless claims were filed. The personal spending in the country dropped 7.5% last month. Topping the negative data are the news about the largest quarterly reduction of the US GDP since the 1930s.
British markets faced a tough session as well. Stocks listed on London exchange tumbled down as well, following the release of the new data on the British real estate. The market is essentially paralyzed at the moment. The FTSE 100 lost 2.2%, negating most of the earnings of this week. British airways IAG went further down by 2.6%, following the reveal of the company’s plans to cut its staff - around a quarter of its pilots included.