Markets Fall After Trump Suggests China Tariffs Over Virus Spread

May 1, 2020 Updated: May 1, 2020

LONDON—World stocks pulled back further on May 1 on grim U.S. economic data and President Donald Trump’s threat to impose new tariffs on China over the CCP virus crisis.

MSCI’s index of global stocks fell 0.4 percent after a tumble late Thursday broke a six-day winning streak for the index.

London-listed stocks slipped as data showed the UK housing market was grinding to a halt. The FTSE 100 was down 2.1 percent, wiping out gains posted earlier in the week on hopes of global economies reopening from weeks of lockdowns.

Another report said British manufacturers suffered the biggest fall in output and orders for at least three decades in April.

British Airways operator IAG slumped 4.6 percent as details of its plans to cut staffing, including a quarter of its pilots, to weather the collapse in air travel caused by the CCP (Chinese Communist Party) virus, commonly known as novel coronavirus.

Trading volumes were thin with many European markets closed for a public holiday.

In a sign of the challenge ahead facing global policymakers, the European Central Bank said on Friday the euro zone economy is likely to rebound in the second half of this year but may fail to return to last year’s level until as late as 2022 due to the pandemic.

In Asia, with many markets also closed, the benchmark Nikkei index fell 2.8 percent, with declines led by chipmaking firms. Australian shares fell 5 percent, their most in five weeks.

The negative sentiment was set by comments from Trump on Thursday that he was concerned about the Chinese regime’s role in the origin and spread of the CCP virus and that his trade deal with China was now of secondary importance to the pandemic. He suggested new tariffs on Beijing as retaliatory measures over the outbreak.

Trump speaks on protecting Americas seniors
President Donald Trump speaks on protecting Americas seniors from the COVID-19 pandemic in the East Room of the White House in Washington, on April 30, 2020. (Mandel Ngan/AFP via Getty Images)

Meanwhile, U.S. initial jobless claims totaled 3.84 million for the week ended April 25, and personal spending tumbled 7.5 percent in March—the biggest decline on record. All that came a day after figures showed the biggest quarterly contraction for the U.S. economy since the Great Recession.

The euro stabilized against the U.S. dollar, while the dollar was down against the Japanese yen, trading at 106.88 yen. Another metric of distress in the markets—the Australian dollar—fell more than 1 percent to 0.6438, its weakest since Tuesday.

Trump’s threat of new tariffs on Beijing sent the Chinese yuan sliding 0.7 percent against the dollar in offshore trade, its biggest drop in a month.

Oil prices fell as weak demand due to the virus and excess supply outweighed a record output cut by OPEC and its allies.

Brent crude for July delivery dropped 45 cents, or 1.7 percent, to $26.03 a barrel, after rising about 11 percent in April. U.S. crude for June delivery slipped 46 cents, or 2.4 percent, to $18.38 a barrel. U.S. oil fell for a fourth month in April.

Spot gold was down 0.5 percent at $1,672.40 per ounce and has fallen more than 3 percent so far this week, its biggest weekly loss since mid-March.

By Tom Arnold. Epoch Times staff contributed to this report