US: Stocks mixed on slower hiring, economic uncertainty
[NEW YORK] Wall Street stocks closed mixed on Wednesday on signs that US economic activity was cooling, even though investors were careful not to overreact to a slowdown in private sector hiring.
The Dow Jones Industrial Average slipped 0.2 per cent to 42,427.74, while the broad-based S&P 500 Index was flat at 5,970.81.
The tech-heavy Nasdaq Composite Index added 0.3 per cent to 19,460.49.
Data from payroll firm ADP showed private sector employment growing by 37,000 jobs in May, sharply below expectations of 115,000 according to a Briefing.com consensus forecast.
But markets shrugged off the figures for now.
'Lower interest rates and the thought of the (Federal Reserve) responding sooner rather than later to signs of a weakening economy have acted as underpinning factors,' said analysts from Briefing.com in a note.
On Wednesday, the Fed also noted that 'economic activity has declined slightly' in its latest 'Beige Book' survey of economic conditions.
It flagged household and business caution due to heightened uncertainty surrounding US President Donald Trump's policies and slower hiring as well.
Markets could have eked out some gains nonetheless on hopes that Trump would eventually reach a trade deal with Chinese President Xi Jinping to resolve a tariff battle launched by Washington, said Peter Cardillo of Spartan Capital Securities. AFP
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AsiaOne
32 minutes ago
- AsiaOne
Trump and Xi agree to more talks as trade disputes brew, World News
WASHINGTON/BEIJING — US President Donald Trump and Chinese leader Xi Jinping confronted weeks of brewing trade tensions and a battle over critical minerals in a rare leader-to-leader call on Thursday (June 5) that left key issues to further talks. During the more than one-hour-long call, Xi told Trump to back down from trade measures that roiled the global economy and warned him against threatening steps on Taiwan, according to a Chinese government summary. But Trump said on social media that the talks focused primarily on trade led to "a very positive conclusion," announcing further lower-level US-China discussions, and that "there should no longer be any questions respecting the complexity of Rare Earth products." He later told reporters: "We're in very good shape with China and the trade deal." The leaders also invited each other to visit their respective countries. The highly anticipated call came in the middle of a dispute between Washington and Beijing in recent weeks over "rare earths" minerals that threatened to tear up a fragile truce in the trade war between the two biggest economies. It was not clear from either countries' statements that the issue had been resolved. A US delegation led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will meet with their Chinese counterparts "shortly at a location to be determined," Trump said on social media. The countries struck a 90-day deal on May 12 to roll back some of the triple-digit, tit-for-tat tariffs they had placed on each other since Trump's January inauguration. Though stocks rallied, the temporary deal did not address broader concerns that strain the bilateral relationship, from the illicit fentanyl trade to the status of democratically governed Taiwan and US complaints about China's state-dominated, export-driven economic model. Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives. Major US stock indexes were higher on Thursday. China's decision in April to suspend exports of a wide range of critical minerals and magnets continues to disrupt supplies needed by automakers, computer chip manufacturers and military contractors around the world. Beijing sees mineral exports as a source of leverage - halting those exports could put domestic political pressure on the Republican US president if economic growth sags because companies cannot make mineral-powered products. The 90-day deal to roll back tariffs and trade restrictions is tenuous. Trump has accused China of violating the agreement and has ordered curbs on chip-design software and other shipments to China. Beijing rejected the claim and threatened counter-measures. "The US side should take a realistic view of the progress made and withdraw the negative measures imposed on China," the Chinese government said in a statement summarising Xi's call with Trump published by the state-run Xinhua news agency. "Xi Jinping emphasised that the United States should handle the Taiwan issue prudently." Top rivals [[nid:718609]] In recent years, the United States has identified China as its top geopolitical rival and the only country in the world able to challenge the US economically and militarily. Despite this and repeated tariff announcements, Trump has spoken admiringly of Xi, including of the Chinese leader's toughness and ability to stay in power without the term limits imposed on US presidents. Trump has long pushed for a call or a meeting with Xi, but China has rejected that as not in keeping with its traditional approach of working out agreement details before the leaders talk. The US president and his aides see leader-to-leader talks as vital to sort through log-jams that have vexed lower-level officials in difficult negotiations. Thursday's call came at Trump's request, China said. It's not clear when the two men last spoke. Both sides said they spoke on Jan 17, days before Trump's inauguration and Trump has repeatedly said that he had spoken to Xi since taking office on Jan. 20. He has declined to say when any call took place or to give details of their conversation. China had said that the two leaders had not had any recent phone calls. The talks are being closely watched by investors worried that a chaotic trade war could disrupt supply chains in the key months before the Christmas holiday shopping season. Trump's tariffs are the subject of ongoing litigation in US courts. Trump has met Xi on several occasions, including exchange visits in 2017, but they have not met face to face since 2019 talks in Osaka, Japan. Xi last travelled to the US in November 2023, for a summit with then-President Joe Biden, resulting in agreements to resume military-to-military communications and curb fentanyl production. [[nid:718697]]
Straits Times
39 minutes ago
- Straits Times
China's rare earth weapon changes contours of trade war battlefield
BEIJING - China has signalled for more than 15 years that it was looking to weaponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise. The scramble in recent weeks to secure export licences for rare earths, capped by Thursday's telephone call between U.S. and Chinese leaders Donald Trump and Xi Jinping, shows China has devised a better, more precisely targeted weapon for trade war. Industry executives and analysts say while China is showing signs of approving more exports of the key elements, it will not dismantle its new system. Modelled on the United States' own, Beijing's export licence system gives it unprecedented insight into supplier chokepoints in areas ranging from motors for electric vehicles to flight-control systems for guided missiles. "China originally took inspiration for these export control methods from the comprehensive U.S. sanctions regime," said Zhu Junwei, a scholar at the Grandview Institution, a Beijing-based think tank focused on international relations. "China has been trying to build its own export control systems since then, to be used as a last resort." After Thursday's call, Trump said both leaders had been "straightening out some of the points, having to do mostly with rare earth magnets and some other things". He did not say whether China committed to speeding up licences for exports of rare earth magnets, after Washington curbed exports of chip design software and jet engines to Beijing in response to its perceived slow-rolling on licences. China holds a near-monopoly on rare earth magnets, a crucial component in EV motors. In April it added some of the most sophisticated types to an export control list in its trade war with the United States, forcing all exporters to apply to Beijing for licences. That put a once-obscure department of China's commerce ministry, with a staff of about 60, in charge of a chokepoint for global manufacturing. The ministry did not immediately respond to Reuters' questions sent by fax. Several European auto suppliers shut down production lines this week after running out of supplies. While China's April curbs coincided with a broader package of retaliation against Washington's tariffs, the measures apply globally. "Beijing has a degree of plausible deniability – no one can prove China is doing this on purpose," said Noah Barkin, senior adviser at Rhodium Group, a China-focused U.S. thinktank. "But the rate of approvals is a pretty clear signal that China is sending a message, exerting pressure to prevent trade negotiations with the U.S. leading to additional technology control." China mines about 70% of the world's rare earths but has a virtual monopoly on refining and processing. Even if the pace of export approvals quickens as Trump suggested, the new system gives Beijing unprecedented glimpses of how companies in a supply chain deploy the rare earths it processes, European and U.S. executives have warned. Other governments are denied that insight because of the complexity of supply chain operations. For example, hundreds of Japanese suppliers are believed to need China to approve export licences for rare earth magnets in coming weeks to avert production disruptions, said a person who has lobbied on their behalf with Beijing. "It's sharpening China's scalpel," said a U.S.-based executive at a company seeking to piece together an alternative supply chain who sought anonymity. "It's not a way to oversee the export of magnets, but a way to gain influence and advantage over America." DECADES IN THE MAKING Fears that China could weaponise its global supply chain strength first emerged after its temporary ban of rare earth exports to Japan in 2010, following a territorial dispute. As early as 1992, former Chinese leader Deng Xiaoping was quoted as saying, "The Middle East has oil, China has rare earths." Beijing's landmark 2020 Export Control Law broadened curbs to cover any items affecting national security, from critical goods and materials to technology and data. China has since built its own sanctions power while pouring the equivalent of billions of dollars into developing workarounds in response to U.S. policies. In 2022, the United States put sweeping curbs on sales of advanced semiconductor chips and tools to China over concerns the technology could advance Beijing's military power. But the move failed to halt China's development of advanced chips and artificial intelligence, analysts have said. Beijing punched back a year later by introducing export licenses for gallium and germanium, and some graphite products. Exports to the United States of the two critical minerals, along with germanium, were banned last December. In February China restricted exports of five more metals key to the defence and clean energy industries. Analysts face a hard task in tracking the pace of China's approvals following the Trump-Xi call. "It's virtually impossible to know what percentage of requests for non-military end users get approved because the data is not public and companies don't want to publicly confirm either way," said Cory Combs, a critical minerals analyst with Trivium, a policy consultancy focused on China. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
an hour ago
- Business Times
Falling sales offer few signs of end to China's property slump
FALLING property sales over the first five months of 2025 show how China's economically important real estate market remained stuck in a slump this year despite signs of heat in the markets in higher-tier cities. Cumulative sales of China's top 100 property developers from January to May fell 7.1 per cent year-on-year to 1.3 trillion yuan (S$233.2 billion), accelerating from the 6.7 per cent drop for the January-to-April period, according to figures published Saturday by China Real Estate Information Corp (CRIC). The CRIC report measures sales from projects directly managed by the top 100 developers, excluding projects including those run by external partners. Figures released by another data provider for the industry, China Index Holdings (CIH), painted a similar picture. Total sales of the top 100 property developers for the first five months were down 10.8 per cent year-on-year to 1.4 trillion yuan, according to a recent CIH report. In the CIH report, sales included revenue from projects managed by both developers' in-house sales teams and those outsourced. For May alone, sales by top developers fell 8.6 per cent year-on-year to nearly 295 billion yuan, although the total was up 3.5 per cent on a month-on-month basis, according to CRIC figures. The CIH data showed an even steeper year-on-year sales drop of 17.3 per cent for May, with the decline widening from 16.8 per cent in April. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up To put the scale of the downturn in perspective, sales of 1.3 trillion yuan amount to less than 30 per cent of the total made over the first five months of 2021, before the slump began. The May sales figures offer a broader view of a national real estate market that has grown increasingly bifurcated. Analysts have been highlighting the difference in demand between metropolises such as Beijing and Shanghai and in lower-tier Chinese cities. In Shanghai, demand looks to be heating up. According to a report by EH Consulting, a real estate industry research institute, multiple residential projects managed to sell out in a single day in May. In one example, a local subsidiary of developer Greentown China Holdings sold all 120 units of a project on the same day it was put on the market, the report said. The homes sold for 195,000 yuan per square meter, generating nearly 7 billion yuan in revenue. It's a different story in some of China's lesser-known and less wealthy cities. The vast majority of property developments in third and fourth-tier cities have far more supply than demand, said a senior sales executive at a leading property developer who did not wish to be named. Two factors have long helped drive China's property market: the need for new homes and the belief that housing was a sure-fire investment. Since the downturn, however, residential property has lost its appeal as an investment in many third- and fourth-tier cities, the executive said. In addition, basic housing needs have already been met in those areas. With the populations of many of the cities already starting to shrink and with the average household already owning two or three homes, a slowdown in home sales was inevitable 'In the long run, we believe the property market will eventually stabilise,' the executive said. 'But in the near term, market divergence will persist.' Addressing the disparity requires tackling the problem from both the supply and demand sides, market insiders said. The CRIC report noted that the current new housing supply has fallen significantly, particularly in hot markets such as Shanghai, Shenzhen, Hangzhou and Chengdu. The situation has limited the potential for a surge in sales volume in those cities. Changes to government policy could help. The EH Consulting report recommended shifting from broad-based stimulus to more targeted, nuanced regulation over the property market. That would help different parts of the market achieve a better balance between supply and demand that would eventually stabilise prices. CIH expects housing market policy to remain accommodative in June. With the mid-year sales window approaching, property developers are likely to accelerate project launches and increase their marketing efforts, the report said. It added that the market in core cities is expected to continue its recovery, although divergences between cities are likely to continue. CAIXIN GLOBAL
