Dow plunges 700 points after Canada arrests Huawei CFO
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The Dow dropped 700 points early Thursday after the Canadian arrest of a Chinese tech executive threatened to inflame trade-war tensions. That’s on top of a 799-point drop that
slammed the Dow on Tuesday ahead of Wednesday’s market close for the funeral of President George H.W. Bush.
The two-day selloff, also fueled by tanking oil prices and worries that bond yields are signaling a possible recession, brought losses to more than 1,300 points, putting stocks on course
to have one of their worst weeks of the year.
Chinese officials on Wednesday demanded the return of Meng Wanzhou, the chief financial officer of Huawei Technologies and a member of its board, who was arrested by Canadian
law enforcement in Vancouver on Saturday at the request of US authorities. Wanzhou is also the daughter of Huawei’s founder, Ren Zhengfei, one of China’s most prominent
“Forget the trade war, it is now all-out economic war with China apparently,” Chris Rupkey, chief market economist at MUFG, wrote in a note. “We are awaiting the next tweets from
Washington to correct this latest swoon in the stock market.” The Dow Jones industrial average was recently off 694.25 points, or 2.8 percent, at 24.332.82.
The arrest comes at a delicate time in US-China relations. Over the weekend, President Trump had tweeted that he was suspending an increase in tariffs after reaching a deal with
China. Wall Street became increasingly skeptical of any deal, however, after administration officials gave conflicting accounts and China declined to confirm any trade deal.
Trump also sent markets scrambling Tuesday after he tweeted, “I am a Tariff Man.”
Later Thursday, investors will be closely watching the comments of Fed Chairman Jay Powell, who goosed markets last week when he said interest rates are “just below” neutral, a
sharp about-face from late October, when he said rates were “a long way” from neutral.
A correction is long overdue
China can now dump their trillions and send the economy back to the stone age - though if it has such glaring flaws it deserves so
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