As for market pessimism, a readers says: “I think it’s all related to our president.
“Media does everything it can to knock him down (and vice-versa) and the stock market is linked to him. So reports of a negative tweet from Trump send the markets reeling.
“The Fed, too, in many ways, controls the market. While the Fed doesn’t seem to want to make the market surge, they don’t want to make it fall either so they’re balancing on a knife’s edge.
“It’s a rigged market and more people are starting to figure that out.”
“Because the yield curve inverted. Because the market pops up and down like a Yo-yo. Because it’s clear that Trump has no idea what he’s doing when it comes to economic matters (or much of anything else). Because Congress is gridlocked and things aren’t getting done.”
Your Rundown for Thursday, Aug. 29, 2019:
Beijing, Hong Kong and Nationalism
Yesterday, China indicated it would suspend some retaliatory tariffs and resume “calm” trade talks with the U.S. On that news, the Dow surged 200 points. (Yo-yo?)
Of course, it would seem to be in China’s best interest to settle with the U.S.
According to the Hong Kong Free Press: “Trump’s trade war is hurting China’s economy. In fact, China’s economic growth stalled to a 27-year low of 6.6%.”
Still high when compared with the rest of the world but economic “contractions [like] these increase citizen dissatisfaction, particularly in nondemocratic countries.”
And we said at The Rundown last week the last thing China wants is civil unrest.
The article continues: “While China has historically stymied popular protests, it has been harder to do so as more of its citizens gain access to the internet.
“Some Chinese citizens have moved away from politely protesting local officials to directly challenging government authority online, which is harder for government officials to contain.”
So what’s a communist regime to do?
“The protests in Hong Kong give China an opportunity to quell… discontent by redirecting their attention toward a common enemy – the demonstrators, who, according to government accounts broadcast on state television, are violent and often paid provocateurs doing America’s bidding.”
And Beijing’s efforts to rally the troops — both figuratively and literally — seem to be working: “On… social media… users circulated a post that personifies China as a ‘little brother’ whom its citizens are rallying around and willing to defend against the demonstrators’ disparaging characterizations.
“At least in the short term,” says the Hong Kong Free Press, “this surge of nationalism will quell discontent at home.”
And the longer Beijing can stave off discontent, the longer it can wait to sit down at the trade war bargaining table?
Market Rundown for Thurs. August 29, 2019
S&P 500 futures are up 28.5 points to 2,918.
Oil is up 48 cents per barrel to $56.26.
Gold’s down just 60 cents to a price of $1,548.50.
Bitcoin is down $252.56 to $9,470.
Have a good day. We’ll talk tomorrow.
For the Rundown,