China Vs. Trump
Dear Rundown Reader,
Dow falls. China’s upset. Trump’s sticking to his guns.
Headlines say we’re vergring toward a good old fashioned trade war.
Can you win a trade war?
Maybe it’s just media hubbub. Today we take a look.
Your Rundown for Friday, March 23, 2018…
What’s 700+ Points Off The Dow Between Friends?
The Dow took a sharp dive Thursday as fierce selling led to a decline of over 700 points.
For the year the Dow now sits at nearly 10% off it’s all time high. Leaving many to ask, is the party over?
The mainstream media headlines point directly to trade war fears as the cause for the meltdown.
Eh. Maybe. We’ve talked about this before. The financial media’s job is to take news events and connect them to market action. Sometimes it’s on point. Most of the time it’s a reach.
The Dow wasn’t the only burning ground yesterday. Every major index excluding the Dow Utilities which saw a scant 0.5% gain dropped 2% or more yesterday.
The S&P 500 fell 68 points, the most in six week according to Bloomberg. The NASDAQ dropped 178 points or 2.43%.
Even Asian markets felt the pain. The Nikkei traded down 4.4% and the Hong Kong HSI also lost 3% or 900 points, according to New York Times market data.
Of course volatility is up again. The CBOE Volatility Index (VIX) jumped 30.7% on Thursday.
No surprises there. And there really shouldn’t be regarding the market tizzy either. Tariffs help no one. Or so the media says.
China is livid about Trump’s tariff plans for $60 billion worth of Chinese imports.
China’s response is new tariffs on $3 billion in U.S. exports. No surprise there.
The Chinese move includes an initial 15% tariff on fruit, nuts, wine and stainless steel pipes.
That’s not going to play well in Napa or the Willamette Valley.
Mobilize the Big Wine Lobby!
Beijing then plans a second round of 25% tariffs aimed specifically at pork and recycled aluminum, according to Market Watch.
Mobilize the Big Pork Lobby!
“There’s too much negative sentiment right now,” notes Amundi Pioneer Asset Management portfolio manager John Carey.
Thank you, Captain Obvious.
This could just be the beginning of the market chop. Hang on tight.
Monday, special report from Mike Burnick on Asian markets overall, and the epic rise in Asian wealth.
Trade wars help no one. Except the winners of trade wars.
Now, turning to the markets this morning…
Market Rundown for Fri., March 23
S&P 500 futures are down 7.75 to 2,635.
Oil’s up a tick to $64.51.
Gold strengthening this morning at $1,342.30.
Bitcoin dips again, now back down to $8,482 according to CoinDesk.
We’ll talk again on Monday. That fun announcement we delayed last week? We’ll reveal all on Monday. You’ll like it, we’re certain.
Have a great weekend. Enjoy the weather. Be safe.
For the Rundown,