US stocks steady but trade war fears linger, despite GDP data

Has US GDP peaked?

Bensignor Investment Strategies President Rick Bensignor on the state of the economy and the outlook for interest rates.

U.S. stocks closed little changed Thursday but investors remained nervous about the impact of the trade war with China even though the latest data showed economic growth was healthy in the first quarter.

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U.S. GDP growth was revised down to 3.1 percent for the first quarter from 3.2 percent on weaker business investment but beat forecasts for 3.0 percent.

Earlier Chinese Vice Foreign Minister Zhang Hanhui accused the U.S. of “economic terrorism” when speaking to reporters in Beijing.  “We oppose a trade war but are not afraid of a trade war. This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying,” Zhang said, according to Reuters.

The possibility that Beijing may block exports of rare-earth minerals used in hi-tech products to the U.S., along with reports that U.S.-EU talks are making no progess are not helping investor sentiment.

Comments by Vice President Mike Pence did not help stocks late in the day. Speaking at a press conference after meeting Canadian Prime Minister Justin Trudeau, Pence warned China that US “could more than double tariffs if needed.” Stocks gave up earlier gains and the U.S. ten year Treasury note yield slipped to 2.23 percent after Pence’s comments.

Ticker Security Last Change %Chg I:DJI DOW JONES AVERAGES 25169.88 +43.47 +0.17% SP500 S&P 500 2788.86 +5.84 +0.21% I:COMP NASDAQ COMPOSITE INDEX 7567.716175 +20.41 +0.27%

On Wednesday, U.S. stocks fell to three month lows and bond prices rallied, while the U.S. ten year Treasury note yield down to 2.21 per cent, a 20 month low, on fears the trade war would undermine global economic growth.

U.S. stock indexes

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