The Motley Fool

The Week in Numbers: Trade War Escalates

US President Donald Trump has escalated the trade war by raising tariffs on US$200 billion worth of Chinese goods to 25% from 10%. He also said that he would soon target the remaining Chinese imports with tariffs. The announcement ends a four-month truce in the trade war that has cost both economies billions of dollars.

China exports unexpectedly fell 2.7% in April, against a forecast of 3% increase. The export decline shows that the global slowdown is weighing on China’s growth. The trade surplus with the US in the first four months this year expanded 10.5% from the corresponding period last year to 570 billion yuan (S$114.6 billion).

The International Monetary Fund said that an all-out trade-war could cause gross domestic product in the US to shrink by 0.6% and 1.5% in China.

Meanwhile, the US Federal Reserve has sounded a warning to investors on the risks to the financial system due to elevated stock valuations and historically high corporate debt loads. However, the central bank said that major banks and insurance companies remain healthy.

The Fed said that the large appetite for risk had kept stock prices relative to expected earnings above their average of the last 30 years, although the valuation has eased slightly recently. The S&P 500 index has risen more than 15% since the turn of the year.

The Lee family that controls 800 Super Holdings Ltd (SGX: 5TG) has made a voluntary conditional offer to privatise the Catalist-listed rubbish collection firm.

The Lees are offering 90 cents in cash for each share, a deal that values the company at S$161 million. The offer price is 16.1% above the last traded price of 77.5 cents on April 26, the last full day on which shares were transacted.  The Lee family currently control 77.6% of the company.

Down under, Australia retailers suffered their weakest quarter in seven years. According to the Australian Bureau of Statistics, retail sales rose 0.3% in March compared with an upwardly revised 0.9% in February. For the first quarter, sales fell 0.1% in inflation-adjusted terms. It was the first negative reading since 2012. With household spending contributing 57% to its GDP, the outlook for the rest of the year remains uncertain.

Meanwhile, the Monetary Authority of Singapore (MAS) said that it is studying whether to admit digital-only banks that have emerged out of fintech firms as licensed entities. Since 2000, only Singapore-incorporated banks were allowed to set up banking subsidiaries to pursue digital-only banking business models.

Patents by Dyson Ltd to build electric cars in Singapore have surfaced this week. The UK-based company, known for its hair dryers, bladeless fans and vacuum cleaners, filed the patent 18 months ago. Dyson said it would build a factory in Singapore to develop the car it hopes to introduce in two years. Dyson said testing of the vehicle would ramp up next month with more than 500 people working on the project.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Jeremy Chia doesn’t own shares in any companies mentioned.