Dow tumbled a whopping 724 (finishing at session lows), decliners ahead of advancers more than 4-1 & NAZ dropped a big 148. The MLP index gave back 4+ to 241 (shown in its dreary chart below) & the REIT index was off 2+ to the 224s. Junk bond funds declined & Treasuries were purchased as stocks were bring sold with the yield on the 10 year Treasury at 2.83%. Oil slid back to the 64s on trade war concerns & gold went up 6 to 1327 (off session highs).
AMJ (Alerian MLP index tracking)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.4737136500020014)
Stocks fell & Treasuries rallied as investors shifted focus from the Federal Reserve to the threat of an escalating trade war with China that has the potential to disrupt global growth. Major US equity benchmarks fell by more than 1%, with technology-heavy gauges slumping nearly 1.3%. Losses were pared a bit after Pres Trump ordered tariffs on about $50B in Chinese goods, a lesser amount in taxes that some investors had fretted. Still, worries persisted that the Asian nation could hit back. The 10-year Treasury yield slid toward 2.8% & gold advanced with the ¥ as investors sought safe havens. The $ rebounded. The threat that a tit-for-tat trade spat with China will erupt & hamper global growth has investors on edge a day after the Fed sought to reassure markets that it's in no hurry to raise rates even as it lifted growth projections for the US economy. Trump's first trade action directly aimed at China would come as policy makers including IMF Managing Director Christine Lagarde warn of a global trade conflict that could undermine the broadest world recovery in years. Stocks extended declines briefly after John Dowd resigned as Trump's lead attorney countering Special Counsel Robert Mueller's Russia probe as the inquiry into possible collusion in the 2016 election intensifies. Facebook (FB) helped pace a decline in the tech sector, falling 2.5% before paring losses. This week's selloff in tech stocks is on pace to be the worst since early Feb.
Dow Tumbles Almost 400 Points on Trade-War Jitters
Pres Trump took his boldest step to level the economic playing field with China, ordering sweeping tariffs on Chinese goods in a move that could escalate already tense trade relations between the world's 2 biggest economies. The pres instructed US Trade Representative (USTR) Robert Lighthizer to levy tariffs on at least $50B in Chinese imports. Trump signed an executive memo issuing the instructions at the White House. Within 15 days, USTR will come up with a proposed list of products that will face higher tariffs. “This has been long in the making,” Trump said, adding that the tariffs could affect as much as $60B in goods. “We have a tremendous intellectual property theft situation going on” with China affecting hundreds of billions of dollars in trade each year, he added. As he signed the tariffs order, Trump told reporters, “This is the first of many.” The US will impose 25% duties on targeted Chinese products to compensate for the harm caused to the American economy from China's policies, according to a fact sheet released by USTR. The proposed product list will include items in aerospace, information & communication technology & machinery. USTR will announce the proposed list in the next “several days,” according to the fact sheet. Trump also directed Treasury Sec Steve Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the US views as strategic, said a senior White House economic adviser. Policy makers across the world are warning of a brewing trade war that could undermine the broadest global recovery in years. US stocks fell sharply today amid worries that the US action could provoke a stern response from China, with the S&P 500 down 1%. Meanwhile, business groups are warning the tariffs could raise prices for consumers & sideswipe stock prices.
Trump Slaps Tariffs on $50 Billion Worth of Chinese Goods
The House passed a $1.3T spending bill that would avert a gov shutdown & increase funding for the military, border security & other domestic programs, though a GOP senator who opposes the measure hasn't said whether he'll force a delay past a Fri funding deadline & cause a closure. In 256-167 vote, the House sent the compromise measure to the Senate, which could vote by the end of the day or tomorrow. White House budget director Mick Mulvaney told reporters that Pres Trump will sign the bill, saying it funds his priorities. The spending bill for this fiscal year has rankled conservative lawmakers who object to increased funds & having to vote without more time to review the 2232-page text that was made public last night. Any senator could force a gov shutdown by refusing to grant the unanimous consent needed for quick action & GOP Senator Rand Paul of Kentucky left open the possibility he may do so. Senator John Kennedy, a Rep who opposes the bill & also raised the prospect of forcing a shutdown, said he decided not to do so. “It sucks,” Kennedy said of the spending measure. “This is a Great-Dane-sized whiz down the leg of every taxpayer in this country. No thought whatsoever to adding over a trillion dollars in debt.” John Cornyn, the #2 Senate Rep, said he anticipates there ultimately will be no objections to a vote. “People realize that the handwriting is on the wall,” Cornyn said. “This has been a long time coming” ever since a Feb agreement to raise limits on spending, he added. The measure would increase spending on the military by $80B & on domestic programs by $63B over previous budget limits set out in the bipartisan budget agreement that ended a Feb shutdown. "Vote yes for the safety and security of this country," House Speaker Paul Ryan urged his colleagues on the floor, adding that the bill provides the biggest boost in military spending in 15 years. Earlier, Ryan was barely able to persuade House GOP members to support a procedural vote setting up debate on the bill. Asked about the rushed process to consider the legislation, Ryan told reporters, "By and large we’ve done a phenomenal job" in following House rules. The proposal includes $1.6B for border security, including money for fencing & levees, though that’s only a fraction of the $25B that Trump wanted to build a wall between the US & Mexico.
U.S. House Passes Spending Bill as Senators Consider Forcing a Shutdown
The EU, Australia, Argentina, Brazil & South Korea are among the nations that will get an initial exemption from looming steel & aluminum tariffs from the Trump administration, US Trade Representative Robert Lighthizer said. Pres Trump is planning to impose tariffs trade penalties aimed at China for flooding the world with cheap steel & aluminum. Lighthizer told the Senate Finance Committee that there are countries involved in various stages of trade talks with the US, & that Trump decided "to pause" the tariffs for those countries. The trade official also cited Canada & Mexico in his list. The US is in consultations with the 2 countries in an effort to renegotiate the North American Free Trade Agreement. Trump moved on a separate trade front, paving the way for tariffs on China as punishment for what he said is the theft of American technology. He told reporters that the threat of the steel and aluminum tariffs was already having an impact. "Many countries are calling to negotiate better trade deals because they don't want to have to pay the steel and aluminum tariffs," Trump said. Lighthizer identified the countries initially exempted from the steel & aluminum tariffs in response to a question. "There are countries with whom we're negotiating, and then the question becomes the obvious one that you think, as a matter of business, how does this work?" Lighthizer said. "So what he has decided to do is to pause the imposition of the tariffs with respect to those countries." Before Lighthizer's congressional testimony, Germany's economy minister, Peter Altmaier, said he had found officials in DC "open to our arguments" during a recent visit with the EU trade commissioner, Cecilia Malmstrom. Altmaier told Germany's parliament "it is a question of fundamental significance: whether we all stand for open and fair world markets in the future." Trump campaigned on promises to bring down America's trade deficit, which stood at $566B last year, by rewriting trade agreements & cracking down on what he called abusive commercial practices by US trading partners. But Trump was slow to turn rhetoric to action. In Jan, he imposed tariffs on imported solar panels & washing machines. Then he announced the steel & aluminum tariffs, saying reliance on imported metals jeopardizes US national security. Lighthizer said the nation's trade deficit indicates that the global rules on trade sometimes make it hard for US companies to export. The administration "is seeking to build a better, fairer system of global markets that will lead to higher living standards for all Americans," Lighthizer added.
The EU & the US seem to have averted a trade war for now, after the administration of Pres Trump said it was ready to exempt the 28-country bloc from tariffs on steel & aluminum. EU leaders, who had threatened to retaliate to any new US tariffs with restrictions on American goods, gave a cautious welcome to news of the exemption. "A trade war would have damaged both sides," Austrian Chancellor Sebastian Kurz tweeted from a summit of leaders in Brussels. US Trade Representative Robert Lighthizer said that Trump had decided to "pause" the tariffs for countries that are engaged in trade negotiations with the United States. He added the EU would be exempt, along with Canada, Mexico, Australia, Argentina & Brazil. The EU is the world's biggest trading bloc & it had drawn up a list of dozens of US goods — from peanut butter to motorcycles, worth €2.8B ($3.4 B) in trade annually — upon which it could impose retaliatory tariffs. European Parliament Pres Antonio Tajani told reporters that "if official confirmation arrives, then that will certainly be a piece of news that goes in the right direction. The U.S. and Europe are two sides of the same coin and I don't think we should get involved in a trade war." The EU rejects Trump's assertion that the tariffs are needed for national security & sees them as protectionist measures. Most EU countries are US allies in the world's biggest security organization, NATO.
The Dow threatens to record its worst Mar in 17 years. And that comes after ugly Feb. Tech stocks have been the leader in the long term rally. Now they are having a tough time finding any friends. Then there are the higher tariffs the world will have to deal with. These uncharted waters are looking very threatening, especially to new investors who have never experienced a serious decline. The Dow dropped 400+, going below 24K, in the last 2 hours of trading, not a good sign for tomorrow.
Dow Jones Industrials
AMJ (Alerian MLP index tracking)
Stocks fell & Treasuries rallied as investors shifted focus from the Federal Reserve to the threat of an escalating trade war with China that has the potential to disrupt global growth. Major US equity benchmarks fell by more than 1%, with technology-heavy gauges slumping nearly 1.3%. Losses were pared a bit after Pres Trump ordered tariffs on about $50B in Chinese goods, a lesser amount in taxes that some investors had fretted. Still, worries persisted that the Asian nation could hit back. The 10-year Treasury yield slid toward 2.8% & gold advanced with the ¥ as investors sought safe havens. The $ rebounded. The threat that a tit-for-tat trade spat with China will erupt & hamper global growth has investors on edge a day after the Fed sought to reassure markets that it's in no hurry to raise rates even as it lifted growth projections for the US economy. Trump's first trade action directly aimed at China would come as policy makers including IMF Managing Director Christine Lagarde warn of a global trade conflict that could undermine the broadest world recovery in years. Stocks extended declines briefly after John Dowd resigned as Trump's lead attorney countering Special Counsel Robert Mueller's Russia probe as the inquiry into possible collusion in the 2016 election intensifies. Facebook (FB) helped pace a decline in the tech sector, falling 2.5% before paring losses. This week's selloff in tech stocks is on pace to be the worst since early Feb.
Dow Tumbles Almost 400 Points on Trade-War Jitters
Pres Trump took his boldest step to level the economic playing field with China, ordering sweeping tariffs on Chinese goods in a move that could escalate already tense trade relations between the world's 2 biggest economies. The pres instructed US Trade Representative (USTR) Robert Lighthizer to levy tariffs on at least $50B in Chinese imports. Trump signed an executive memo issuing the instructions at the White House. Within 15 days, USTR will come up with a proposed list of products that will face higher tariffs. “This has been long in the making,” Trump said, adding that the tariffs could affect as much as $60B in goods. “We have a tremendous intellectual property theft situation going on” with China affecting hundreds of billions of dollars in trade each year, he added. As he signed the tariffs order, Trump told reporters, “This is the first of many.” The US will impose 25% duties on targeted Chinese products to compensate for the harm caused to the American economy from China's policies, according to a fact sheet released by USTR. The proposed product list will include items in aerospace, information & communication technology & machinery. USTR will announce the proposed list in the next “several days,” according to the fact sheet. Trump also directed Treasury Sec Steve Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the US views as strategic, said a senior White House economic adviser. Policy makers across the world are warning of a brewing trade war that could undermine the broadest global recovery in years. US stocks fell sharply today amid worries that the US action could provoke a stern response from China, with the S&P 500 down 1%. Meanwhile, business groups are warning the tariffs could raise prices for consumers & sideswipe stock prices.
Trump Slaps Tariffs on $50 Billion Worth of Chinese Goods
The House passed a $1.3T spending bill that would avert a gov shutdown & increase funding for the military, border security & other domestic programs, though a GOP senator who opposes the measure hasn't said whether he'll force a delay past a Fri funding deadline & cause a closure. In 256-167 vote, the House sent the compromise measure to the Senate, which could vote by the end of the day or tomorrow. White House budget director Mick Mulvaney told reporters that Pres Trump will sign the bill, saying it funds his priorities. The spending bill for this fiscal year has rankled conservative lawmakers who object to increased funds & having to vote without more time to review the 2232-page text that was made public last night. Any senator could force a gov shutdown by refusing to grant the unanimous consent needed for quick action & GOP Senator Rand Paul of Kentucky left open the possibility he may do so. Senator John Kennedy, a Rep who opposes the bill & also raised the prospect of forcing a shutdown, said he decided not to do so. “It sucks,” Kennedy said of the spending measure. “This is a Great-Dane-sized whiz down the leg of every taxpayer in this country. No thought whatsoever to adding over a trillion dollars in debt.” John Cornyn, the #2 Senate Rep, said he anticipates there ultimately will be no objections to a vote. “People realize that the handwriting is on the wall,” Cornyn said. “This has been a long time coming” ever since a Feb agreement to raise limits on spending, he added. The measure would increase spending on the military by $80B & on domestic programs by $63B over previous budget limits set out in the bipartisan budget agreement that ended a Feb shutdown. "Vote yes for the safety and security of this country," House Speaker Paul Ryan urged his colleagues on the floor, adding that the bill provides the biggest boost in military spending in 15 years. Earlier, Ryan was barely able to persuade House GOP members to support a procedural vote setting up debate on the bill. Asked about the rushed process to consider the legislation, Ryan told reporters, "By and large we’ve done a phenomenal job" in following House rules. The proposal includes $1.6B for border security, including money for fencing & levees, though that’s only a fraction of the $25B that Trump wanted to build a wall between the US & Mexico.
U.S. House Passes Spending Bill as Senators Consider Forcing a Shutdown
The EU, Australia, Argentina, Brazil & South Korea are among the nations that will get an initial exemption from looming steel & aluminum tariffs from the Trump administration, US Trade Representative Robert Lighthizer said. Pres Trump is planning to impose tariffs trade penalties aimed at China for flooding the world with cheap steel & aluminum. Lighthizer told the Senate Finance Committee that there are countries involved in various stages of trade talks with the US, & that Trump decided "to pause" the tariffs for those countries. The trade official also cited Canada & Mexico in his list. The US is in consultations with the 2 countries in an effort to renegotiate the North American Free Trade Agreement. Trump moved on a separate trade front, paving the way for tariffs on China as punishment for what he said is the theft of American technology. He told reporters that the threat of the steel and aluminum tariffs was already having an impact. "Many countries are calling to negotiate better trade deals because they don't want to have to pay the steel and aluminum tariffs," Trump said. Lighthizer identified the countries initially exempted from the steel & aluminum tariffs in response to a question. "There are countries with whom we're negotiating, and then the question becomes the obvious one that you think, as a matter of business, how does this work?" Lighthizer said. "So what he has decided to do is to pause the imposition of the tariffs with respect to those countries." Before Lighthizer's congressional testimony, Germany's economy minister, Peter Altmaier, said he had found officials in DC "open to our arguments" during a recent visit with the EU trade commissioner, Cecilia Malmstrom. Altmaier told Germany's parliament "it is a question of fundamental significance: whether we all stand for open and fair world markets in the future." Trump campaigned on promises to bring down America's trade deficit, which stood at $566B last year, by rewriting trade agreements & cracking down on what he called abusive commercial practices by US trading partners. But Trump was slow to turn rhetoric to action. In Jan, he imposed tariffs on imported solar panels & washing machines. Then he announced the steel & aluminum tariffs, saying reliance on imported metals jeopardizes US national security. Lighthizer said the nation's trade deficit indicates that the global rules on trade sometimes make it hard for US companies to export. The administration "is seeking to build a better, fairer system of global markets that will lead to higher living standards for all Americans," Lighthizer added.
Trump to 'pause' looming metal tariffs for some countries
The EU & the US seem to have averted a trade war for now, after the administration of Pres Trump said it was ready to exempt the 28-country bloc from tariffs on steel & aluminum. EU leaders, who had threatened to retaliate to any new US tariffs with restrictions on American goods, gave a cautious welcome to news of the exemption. "A trade war would have damaged both sides," Austrian Chancellor Sebastian Kurz tweeted from a summit of leaders in Brussels. US Trade Representative Robert Lighthizer said that Trump had decided to "pause" the tariffs for countries that are engaged in trade negotiations with the United States. He added the EU would be exempt, along with Canada, Mexico, Australia, Argentina & Brazil. The EU is the world's biggest trading bloc & it had drawn up a list of dozens of US goods — from peanut butter to motorcycles, worth €2.8B ($3.4 B) in trade annually — upon which it could impose retaliatory tariffs. European Parliament Pres Antonio Tajani told reporters that "if official confirmation arrives, then that will certainly be a piece of news that goes in the right direction. The U.S. and Europe are two sides of the same coin and I don't think we should get involved in a trade war." The EU rejects Trump's assertion that the tariffs are needed for national security & sees them as protectionist measures. Most EU countries are US allies in the world's biggest security organization, NATO.
US-Europe trade war likely averted, for now
The Chinese gov vowed to take "all
necessary measures" to defend the country's interests if Pres Trump targets it for allegedly stealing American technology or
pressuring US companies to hand it over. "China
will not sit idly to see its legitimate rights damaged and must take
all necessary measures to resolutely defend its legitimate rights," the
Commerce Ministry in Beijing said. Dozens of industry groups sent a letter last
weekend to Trump warning that "the imposition of sweeping tariffs would
trigger a chain reaction of negative consequences for the U.S. economy,
provoking retaliation; stifling U.S. agriculture, goods, and services
exports; and raising costs for businesses and consumers." US
business groups mostly agree that something needs to be done about
China's aggressive push in technology, but they worry that China will
retaliate by targeting US exports of aircraft, soybeans & other
products & start a tit-for-tat trade war of escalating sanctions
between the 2 economies. The
announcement will mark the end of a 7-month US investigation into
the hardball tactics China has used to challenge US supremacy in
technology, including dispatching hackers to steal commercial secrets & demanding that US companies hand over trade secrets in exchange
for access to the Chinese market. The administration argues that years
of negotiations with China have failed to produce results.
China vows to defend its interests against US trade actions
The Dow threatens to record its worst Mar in 17 years. And that comes after ugly Feb. Tech stocks have been the leader in the long term rally. Now they are having a tough time finding any friends. Then there are the higher tariffs the world will have to deal with. These uncharted waters are looking very threatening, especially to new investors who have never experienced a serious decline. The Dow dropped 400+, going below 24K, in the last 2 hours of trading, not a good sign for tomorrow.
Dow Jones Industrials
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