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Weekly market wrap March 23, 2018: Threat of U.S. trade war with China sinks markets
3/25/2019 6:03:37 AM
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By Fund Library News Wire  | Friday, March 23, 2018


By Mike Keerma

Shrugging off some positive U.S. economic data and President Trump’s signing of a US$1.3 trillion spending bill that headed off a government shutdown, investors focused instead on the imposition of tariffs on US$50 billion of Chinese goods, and the threat of retaliatory trade measures by China. In addition, the U.S. Federal Reserve raised its federal funds rate by 25 basis points on Wednesday, to a target range between 1.5% and 1.75%. As a result, the main North American benchmarks all lost ground over the week, with the Nasdaq Composite Index posting the steepest weekly loss at 6.5%. The S&P 500 Composite Index dropped 6%, while Toronto’s S&P/TSX Composite Index slid 3%, cushioned somewhat by a 5.6% weekly gain in the price of crude oil and a 3% advance for gold.

In the U.S., durable goods orders jumped 3.1% in February, posting the largest gain since last summer. Growth in durable goods (items designed to last for longer periods, like appliances, planes, autos, etc.) is closely watch as a signal of underlying economic growth. In addition, core capital goods orders, a measure of business investment, rose at an annual rate of 8% in February, its highest in nearly six years.

And while President Trump also approved exemptions from metals tariffs for the European Union and six other nations, including Canada, investors remained focused on the potential for a trade war with China following the imposition of $50 billion tariffs on Chinese goods – in itself a relatively small amount in U.S trade terms. However, the threat of trade retaliation by China and an escalation of global trade tensions had investors anxious about the impact on earnings of U.S. global giants as well as on commodities like soybeans.


* Sun Life to terminate two Excel ETFs. Sun Life Global Investments (Canada) Inc. and Excel Funds Management Inc. announced the termination of Excel Global Balanced Asset Allocation ETF (TSX: EXGB) and Excel Global Growth Asset Allocation ETF (TSX: EXGG), effective at close of business on or about May 30, 2018. Sadiq S. Adatia, Chief Investment Officer, Sun Life Global Investments, said by way of explanation that Sun Life will “take a more measured approach to evaluating the launch of ETFs” and will “continue to assess the ETF market and our clients’ needs as we explore the best potential approach for entering the ETF space.”

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

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© 2018 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

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