The Collapse That Wasn’t

Dear Rundown Reader,

Your letters on Tesla’s production problems:

“Musk must forego his ego. He should ask Toyota to become joint venture partners…”

Maybe not a bad idea.

“I think Japanese, German, and U.S. auto manufacturers have caught up with Tesla, technology-wise. Any huge advantage they once had is gone.”

“B.S. is the only thing really keeping Tesla going…”

Your letters on Walmart bidding for Humana:

“I don’t like shopping at those stores. I can’t imagine what Walmart would do to Humana.”

Oh, we bet you can imagine. You just don’t like what you see.

“I never thought I would look at Walmart as a healthcare provider. I guess being a 900-lb gorilla has its advantages.”

Your Rundown for Thursday, April 5, 2018…

Soybeans Latest Trade War Victim

In a real war innocents get slaughtered by the thousands.

In a trade war the same thing happens.

As trade tensions ratchet up between China and the U.S., it’s the little guys who will suffer the most.

Farmers are in trouble. Small business owners are in trouble. Consumers are in trouble. Mom and pop investors are too.

Tuesday the U.S. Trade Representative announced a list of roughly 1,300 Chinese goods now subject to a 25% tariff, including a particular focus on technologies, as reported by Business Insider.

In a tit-for-tat battle, China responded by announcing new tariffs on over 100 U.S. products, including soybeans, automobiles, and chemicals.

Wednesday the DJIA began the day down 500 points. The S&P 500 index started Wednesday down 1.1% at 2,585. The Nasdaq fell 1.2% at 6,855, according to Market Watch.

As the day progressed the major indexes recovered some losses but the whipsaw action kept folks guessing.

End of session, the Dow was up 230 points to 24,263.

Go figure. Another day goes by, and even with the trade war rhetoric, we avoid a market apocalypse.

But the picture’s not entirely rosy. The major indexes over the last two months:

Tariff Talks

The hardest hit sectors yesterday were again the big names in tech and major manufacturers.

Boeing (NYSE: BA) and Caterpillar (NYSE: CAT) led the losers.

Then there’s the soybean situation…

Soy was one of the U.S. exports slapped with new tariffs.

About 40% of China’s soybean imports come from the U.S. and are valued at $14 billion, according to the Iowa Soybean Association.

According to Business Insider, soybeans are a crucial U.S. export with “the number of acres farmers plan to dedicate to soybeans expected this year to outstrip corn for only the second time in the history.”

That hurts in the Heartland.

At least a trade war isn’t a real war, a hot war. What do you think the chances are one could lead to the other?

We bet the markets could survive any kind of war. They always do.

Now, turning to futures this morning…

Market Rundown for Thurs. April 5

S&P 500 futures are up 11.50 this morning at 2,659.

Oil’s flat at $63.61.

Gold’s down $8.20 at $1,332.

Bitcoin’s slump continues, down to $6,800 this morning according to CoinDesk.

We’ll talk again on Friday. Have a great day.

For the Rundown,

Aaron Gentzler

Aaron Gentzler

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Aaron Gentzler

Aaron Gentzler is the publisher of Seven Figure Publishing. He is also the editor of The Rundown. Aaron’s been with Agora Financial/Seven Figure Publishing for 13 years. He's been covering technology and markets for over a decade.

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