Tariff talk unnerves equities

Heading into the close, the FTSE 100 has dropped by 30 points, while US equities are struggling once again.

• Trade war fears hit equities once more
• Recession worries as yield curve dominates headlines
• Ferguson sheds ground despite strong update

Having been keen on US stocks yesterday, traders seem a bit more circumspect today, as Wall Street drops back, lead by financial stocks. A tweet from the president, defining himself as a ‘tariff man’ (perhaps one of the least exciting superheroes around), has reminded everyone that the issue of trade wars has not gone away, and indeed his apparent success regarding China (and even here details are sketchy) may well embolden him to push harder on his European allies. Some nervous types will also be concerned about the probability of a US recession, as the latest focus on the yield curve prompts fears of further economic weakness. But with an average of 14 months between inversion and recession, it might not be time to dump equities just yet.

There was plenty to like in Ferguson’s update this morning, but given the shares had risen 10% into the news it was hard for the shares to hold their ground. While there was little in the way of a positive surprise, the business continues to prosper in the US, and though there are increasing fears of weaker US economic data in the near future, the business still looks attractive over the longer term.