— This is the script of CNBC's news report for China's CCTV on June 26, 2018, Tuesday.
During the overnight, US stock market dived again. At the close, Dow Jones Industrial Average fell 1.33%, S&P 500 index slid 1.37%, and NASDAQ Composite index lost more than 2%. The market worries the increasing trade tension between US and its international trade partners, so stock market reacted with sale-off. According to the news released in the overnight, White House will curb some specific countries to invest on US tech industry, and that made many tech giants’ stock price slumped.
For example, among FANG companies, Facebook shed 2.67%, Apple was down 1.49%, Netflix plummeted 6.47% and Google’s parent company Alphabet lost 2.57%.
These companies benefit from the development of the technology industry and the expansion in overseas markets, so they are known to be tech giants. Therefore “Curb overseas investment” these several words impact the market significantly. Wall Street Journal and Bloomberg reported that these restrictions are mainly aimed at China, so a 500 points decrease was seen in Dow & Jones.
However, after that, U.S. Treasury Secretary Mukuchin wrote on twitter ripping reports of Wall Street Journal and Bloomberg as fake news. The White House’s chief economic advisor Navarro said in the exclusive interview with CNBC that US has no plan now.
"Are you saying there are no plans period. Is that there are no plans to impose investment restrictions because it sounds to me like that's how you're saying say there's no plans today."
[White House’s chief economic advisor Navarro] "No no no. The only thing the only thing that's going to happen in the near term is on Friday the Treasury Department is going to report to the president about the issue related to China. That's all whats going to happen. In respect to other countries, there's absolutely nothing on the table."
Navarro also emphasized that US trade policy does not have any specific countries targeted, including Europe, Japan and Canada. As a result, we can see that US stock market clawed back gains after Navarro’s talk in the overnight; The Dow's downtrend narrowed about 200 points.
[White House’s chief economic advisor Navarro] "If you look at Europe for example we run 151 billion dollar trade deficit in goods. There are auto tariffs are four times higher than ours. Their VAT taxes are punitive. So all we want to do is be able to sell as many Fords in Germany as they sell BMW here. There's nothing wrong with that. And the president's standing up to that principle we have issues with Canada on dairy and lumber which rewards longstanding. We have other issues with other countries Japan sells us 100 cars for every one we export to them."
Meanwhile, Navarro also comfort the tech companies in the interview, indicating that the White House recognizes the importance of tech industry to US economy,
[White House’s chief economic advisor Navarro] "it's simply that the only way to grow and prosper and have your real wages grow up go up through innovation through technological innovation. So it is in our interest. The president recognizes this to not only maintain a strong position in the traditional manufacturing industries but also to maintain a very dominant lead in the emerging industries of the future."
We will keep an eye on the following trend of the market.