- European stocks erase morning drop
- US stocks trade higher but techs lag
- Precious metals move significantly higher as trade tensions escalate
- More PMIs hint at global manufacturing activity contraction
The beginning of the new week across equity markets in Asia has not been successful as most of them have continued falling. This downbeat performance came on Friday after Donald Trump said the US would impose a 5% tariff rate on all goods imported from Mexico in a bid to deal with a so-called migration crisis. Although Mexican President Lopez Obrador does not seem to be concerned with a trade dispute with the US, this issue could become more long-lasting and thereby weighing on financial markets.
Infineon Technologies performed poorly today after the company informed that it agreed to acquire Cypress Semiconductor, a US-based company taking up production of memory chips, for $10 billion in a cash offer. Infineon will pay for one share of Cypress Semiconductor $23.85, it means a 46% premium to the average price seen over the past 30 days.
Technical overview of DAX index can be found here.
In May, UK manufacturing PMI slumped to 49.4 from 53.1, reaching its 34-month low and seeing the heaviest monthly decline since July 2016, shortly after the Brexit referendum. The details of Markit survey pointed to “increased difficulties in convincing clients to commit to new contracts during May”.
FedEx shares are performing poorly at the beginning of Monday’s session. It should not come as a surprise given that the company has been targeted by China over the weekend. World’s second largest economy has launched a probe into “wrongful” deliveries of the US courier.