Trade tariffs and a potential trade war continue to weigh on Wall Street Wednesday as the sudden resignation of President Donald Trump's well-regarded economic advisor reverberated through global financial markets.
Stock futures took a dive in Tuesday's after-hours trade when news outlets reported Chief Economic Advisor Gary Cohn's departure. Considered an ally of financial markets and a proponent of free trade, Cohn's exit was seen eliminating any chance for the president to reconsider trade tariffs and sent the dollar reeling, bond yields tumbling and rekindled concerns about persistent discord in the White House.
The Dow Jones Industrial Average plummeted more than 300 points at the open and experienced a brief bout of short-covering on news trade protectionist advocate Peter Navarro (and the man behind the scenes of Cohn's resignation) is not being considered as Cohn's replacement.
But sellers quickly regained control, emboldened by media reports that with the final barrier to trade tariffs removed from Trump's inner circle, a Presidential Proclamation on steel tariffs is scheduled for Thursday.
The news overshadowed this morning's economic data, although the swelling trade deficit added fuel to the president's campaign to address trade imbalances. The deficit increased 5% to its highest level since 2008 at $56.6 billion, above expectations for a deficit of $55.1 billion.
In other economic news, private payrolls increased 235,000 in February according to a monthly survey by Automated Data Processing. This exceeds expectations for an increase of 205,000 and prompted Moody's economist Mark Zandi to caution the job market "threatens to overheat." Zandi predicts the jobless rate to fall to a 3-handle by mid-2019.
Additionally, Q4 non-farm productivity was revised up to unchanged from down 0.1%, while unit labor costs were revised to +2.5% from +2.0%. Both were better than Wall Street's expectations.
European markets shrugged off the Cohn exit and the fallout on international trade by closing with moderate gains. Germany's DAX took the top spot with a gain of 1.09%.
Crude oil was down $1.50 to $61.10 per barrel. Natural gas was up $0.03 to $2.78 per 1 million BTU. Gold was down $8.00 to $1,327.10 an ounce, while silver was down $0.28 to $16.50 an ounce. Copper was down $0.03 to $3.13 per pound.
Among energy ETFs, the United States Oil Fund was down 2.63% to $12.24 with the United States Natural Gas Fund was up 0.78% to $23.13. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 1.32% to 21.71 while SPDR Gold Shares were down 0.57% to $125.81. The iShares Silver Trust was down 1.52% to $15.54.
Here's where the markets stand at mid-day:
NYSE Composite Index was down 95.46 points (-0.75%) to 12,625.31
Dow Jones Industrial Index was down 326.51 points (-1.31%) to 24,557.61
S&P 500 was down 21.09 points (-0.79%) to 2,706.20
Nasdaq Composite Index was down 39.53 points (-0.54%) to 7,330.42
FTSE 100 was up 11.09 points (+0.16%) to 7,157.84
DAX was up 131.49 points (+1.09%) to 12,245.36
CAC 40 was up 17.60 points (+0.34%) to 5,187.83
Nikkei 22 was down 165.04 points (-0.77%) to 21,252.72
Hang Seng Index was down 313.81 points (-1.03%) to 30,196.92
Shanghai China Composite Index was down 18.18 points (-0.55%) to 3,271.46
NYSE SECTOR INDICES
NYSE Energy Sector Index was down 172.32 points (-1.68%) to 10,598.22
NYSE Financial Sector Index was down 75.84 points (-0.92%) to 8,194.14
NYSE Healthcare Sector Index was down 63.05 points (-0.44%) to 14,278.32
(+) MED (+34.96%) Q4 results beat Wall Street's expectations
(+) PIXY (+26.74%) Leveraging blockchain as a digital ledger for capital transactions
(+) RGNX (+15.57%) Reported strong Q4 results
(+) ADSK (+13.21%) Q4 earnings beat expectations
(-) WHLR (-19.11%) Q4 results disappointed
(-) SPPI (-17.73%) Posted larger-than-expected Q4 loss, below consensus revenue
(-) DLTR (-15.75%) Reported downbeat Q4 results and issued disappointing guidance
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