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BUSINESS Tuesday 8 January 2019
A25

Jittery Wall Street has a lot ahead to be nervous about

By STAN CHOE technologies, potentially
Associated Press undermining American
NEW YORK (AP) — Wel- technological dominance.
come to the brave new According to a March re-
world of investing, where port by the U.S. trade rep-
every day in the stock mar- resentative, China hacks
ket can feel like bedlam. into American compa-
Investors have been ca- nies’ computer networks
reening from fear to relief to steal trade secrets and
and back again as they forces foreign firms to share
react to morsels of news technology as the price of
about the health of the admission to the Chinese
economy and corporate market. The standoff will be
profits, the global trade difficult to resolve before a
war and when the Federal March 1 deadline. That is
Reserve will next raise inter- when U.S. tariffs on $200 bil-
est rates. lion in Chinese imports are
With each mood shift, stock scheduled to jump to 25
prices have swung wildly. percent from 10 percent.
Unusually big moves — Chinese leaders have sig-
both up and down — have naled their willingness to
come at a frequency not address U.S. complaints
seen in years. about America’s massive
On Friday, the S&P 500 in- In a Thursday, Jan. 3, 2019 file photo, trader Michael Milano works on the floor of the New York trade deficit with China
dex soared 3.4 percent Stock Exchange. by buying more soybeans,
following a stronger-than- Associated Press natural gas and other U.S.
expected U.S. jobs report, acts, or overreacts.” their companies’ quarter- positive in 2019, just slower products.
news of trade talks be- Expect the jitters to con- ly earnings are released. than last year, much like But they are likely to resist
tween the United States tinue. Reports are coming Stock prices could swing the economy. He never- pressure from Washing-
and China and comments that will give investors clues depending on what they theless expects stocks to ton to scrap or scale back
from the Fed seen as help- about whether their fears say about how moderating claw back their recent loss- technology policies they
ful for stocks. of a possible recession are economic growth, U.S.-Chi- es and return to a record see as vital to China’s future
It was a sharp reversal from warranted, as well as up- na trade tensions and inter- by the end of the year, prosperity and strength.q
just the day before when dates on interest rates and est rates could affect their though with a lot of volatil-
investors saw the glass trade policy. Among the upcoming results. ity in between.
decidedly half empty. approaching milestones Apple’s warning last week — U.S-China trade talks
On Thursday, the S&P 500 that could be the next to about slow iPhone sales in A U.S. delegation began
plunged 2.5 percent after roil Wall Street: China, the world’s second- talks in Beijing on Monday
a disappointing U.S. man- — Earnings season largest economy, shocked aimed at resolving a trade
ufacturing report raised Starting next week, com- the market and sent Ap- dispute that has alarmed
fears about a possible re- panies will begin report- ple’s stock down nearly 10 global investors and threat-
cession and Apple warned ing their profits for the last percent. On the same day, ens to drag down world-
about weak iPhone sales in three months of 2018, and Delta Air Lines fell nearly 9 wide economic growth.
China. That two-day whip- expectations are high. An- percent after it trimmed its The world’s two biggest
lash followed 2018, a year alysts are forecasting 11.4 forecast for fourth-quarter economies are battling
when the S&P 500 had 20 percent growth for S&P 500 revenue. over U.S. allegations that
days where it swung by at companies, which would Orlando said he expects Beijing uses predatory tac-
least 2 percent, twice as be the fifth straight quarter earnings growth will remain tics to acquire advanced
many as any of the prior of gains topping 10 per-
six years. The market has cent, according to Fact-
gotten so topsy-turvy that Set.
when Friday’s jobs report Those numbers are key be-
first came out, about an cause stock prices tend to
hour before the New York track corporate profits over
Stock Exchange opened, the long term. But even
some investors wondered more attention will likely
if it would cause relief or be paid to what CEOs say
panic. The numbers were about future profits.
strong, but were they so “We’re going to have a
strong as to push the Fed nice, solid double-digit
to raise rates faster, which number” for fourth-quarter
would be bad for stocks? earnings growth, said Phil
“I did find myself wonder- Orlando, chief equity mar-
ing how the market is going ket strategist at Federated
to react to this: Are people Investors. “I think the mar-
asking, ‘Is this good?’” said ket’s bigger concern is how
Ernie Cecilia, chief invest- big the 2019 deceleration
ment officer at Bryn Mawr is.”
Trust. “It just shows the en- Executives generally talk
vironment we’re in. It’s un- with analysts and inves-
certain how the market re- tors immediately after