The arrest of the chief financial officer of a giant Chinese telecom company for allegedly violating U.S. sanctions against Iran appears to be contributing to plunging stock prices Thursday.
Meng Wanzhou, chief financial officer of Huawei Technologies, was arrested Saturday in Canada at the request of the United States, in a move seen as likely to upset crucial trade and economic ties between the U.S. and China.
The Dow Jones Industrial Average benchmark was down nearly 540 points not long after noon Thursday, a 2.16 percent drop.
PNC Investments President and Chief Executive Rich Guerrini said corporate earnings estimates have come down, but he advised investors to be cautious.
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“Even putting aside trying to diagnose what is causing the volatility, I do think it is emblematic of the fact that we are still operating within the context of a correction that has yet to fully run its course,” Guerrini said in a statement released by PNC.
He added: “We think the backdrop still supports earnings growth next year … In many ways, we think 2019 could look like 2018 in the sense that markets can make progress higher, but expectations should be managed and volatility should be expected.
“It is going to be another exercise in managing emotional responses to volatile markets,” Guerrini also said.
According to the New York Times, a spokesman for the Chinese embassy in Canada urged authorities “to immediately correct the wrongdoing and restore the personal freedom of Ms. Meng.”