Dow dropped 263, decliners over advancers about 2-1 & NAZ gave back 43. The MLP index was off a big 4+ to the 264s & the REIT index gained 1+ to the 246s. Junk bond funds were lower & Treasuries rose in price, taking the yield on the 10 year Treasury down 5 basis points to 2.9%. Oil sank 1+ to the 65s & gold plunged 22 to 1286.
AMJ (Alerian MLP Index tracking fund)
Pres Trump announced that the US will implement a 25% tariff on $50B of goods, & if China retaliates, the US will strike back with more tariffs. The tariffs will be applied on $50B worth of goods with industrially significant technologies, including goods related to China's Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the US & many other countries. US Trade Representative said the tariffs cover 1102 separate product categories, initially they were considering 1333. The first set of tariffs will apply 25% duty on 818 product lines, & the 2nd set of tariffs contains 284 proposed product lines identified as benefiting from China's industrial policy. “The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices,” the statement read, adding, “These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.” If China engages in retaliatory measures, such as imposing new tariffs on US goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China, the US will pursue additional tariffs. China's Commerce Ministry has responded, saying it “firmly objects” the US trade measures toward China, adding, that it harms interests on both sides. The ministry added that China will impose a tariff measure of similar size & intensity. The tariffs will go into effect Jul 6.
Consumer sentiment jumped at the beginning of Jun, moving opposite of expectations & heading back toward levels seen earlier this year. The Univ of Mich report on consumer attitudes about the economy hit 99.3 in a preliminary Jun reading, higher than the 98.3 expected. The index was more than a point above the May reading of 98. Consumers surveyed by the Univ of Mich viewed both their current financial situation & the current buying conditions for household durables more favorably, according to the survey's chief economist Richard Curtin. "Greater certainty about future income and job prospects have become the main drivers of more favorable purchase plans," Curtin said. Curtin highlighted a chart showing the connection between how consumers' expect unemployment to change & the current yearly per capita change for spending on durable goods. The chart shows that "the unemployment rate during the year ahead was more often expected to decline than increase," Curtin said, "which should modestly accelerate purchases." The survey measures 500 consumers' attitudes on future economic prospects, in areas such as personal finances, inflation, unemployment, government policies & interest rates.
Consumer sentiment surprises in early June reading, moving opposite of expectations
China says tariffs of 'same scale' coming immediately, indicates trade talks will need to start over
The Dow began the day falling to 25K & is now below that important support level. Trump will slap tariffs on some Chinese goods & that is likely to bring on higher tariffs on their exports to the US. Talks have consequences & they are striking home now. REITs are doing well as many have little, if any, direct exposure to higher tariffs, although it's difficult to imagine how changes in the economic environment will affect everybody. Gold was also hit with selling. That money is be going into Treasuries & other "safe haven" assets. The Dow is back to its longer term trend this year of sideways motion under 25K.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 65.93 | -0.96 | -1.4% |
| GC=F | Gold | 1,286.50 | -21.80 | -1.7% |
Stocks were lower morning, after
Pres Trump released the latest tariffs on China, targeting $50B in Chinese goods. When announcing the
tariffs, The White House pledged that if China were to retaliate, the
US will strike back with more tariffs, & China has already
responded. Shortly after the tariffs were
announced China's Commerce Ministry said it will impose tariff measures
of a “similar size and intensity.” Beyond the tariffs, there was some economic data
reports for traders to contend with. US capacity utilization fell to
77.9% in May from 78.1%, while the Empire State manufacturing survey
rose 4.9 points to 25 in Jun, well above expectations for 19.1 & the
best reading since Oct. The Univ of Mich consumer
sentiment rose to 99.3 in Jun. Commodities were mostly lower, will gold futures down by over 1%.
Stocks pressured by potential trade war
Pres Trump announced that the US will implement a 25% tariff on $50B of goods, & if China retaliates, the US will strike back with more tariffs. The tariffs will be applied on $50B worth of goods with industrially significant technologies, including goods related to China's Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the US & many other countries. US Trade Representative said the tariffs cover 1102 separate product categories, initially they were considering 1333. The first set of tariffs will apply 25% duty on 818 product lines, & the 2nd set of tariffs contains 284 proposed product lines identified as benefiting from China's industrial policy. “The United States can no longer tolerate losing our technology and intellectual property through unfair economic practices,” the statement read, adding, “These tariffs are essential to preventing further unfair transfers of American technology and intellectual property to China, which will protect American jobs.” If China engages in retaliatory measures, such as imposing new tariffs on US goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China, the US will pursue additional tariffs. China's Commerce Ministry has responded, saying it “firmly objects” the US trade measures toward China, adding, that it harms interests on both sides. The ministry added that China will impose a tariff measure of similar size & intensity. The tariffs will go into effect Jul 6.
Trump will impose tariffs on $50 billion of Chinese goods, prepared to retaliate if needed
Consumer sentiment jumped at the beginning of Jun, moving opposite of expectations & heading back toward levels seen earlier this year. The Univ of Mich report on consumer attitudes about the economy hit 99.3 in a preliminary Jun reading, higher than the 98.3 expected. The index was more than a point above the May reading of 98. Consumers surveyed by the Univ of Mich viewed both their current financial situation & the current buying conditions for household durables more favorably, according to the survey's chief economist Richard Curtin. "Greater certainty about future income and job prospects have become the main drivers of more favorable purchase plans," Curtin said. Curtin highlighted a chart showing the connection between how consumers' expect unemployment to change & the current yearly per capita change for spending on durable goods. The chart shows that "the unemployment rate during the year ahead was more often expected to decline than increase," Curtin said, "which should modestly accelerate purchases." The survey measures 500 consumers' attitudes on future economic prospects, in areas such as personal finances, inflation, unemployment, government policies & interest rates.
Consumer sentiment surprises in early June reading, moving opposite of expectations
China's Commerce Ministry said that it will
respond immediately on the same scale to the Trump administration's new
tariffs on Chinese goods worth up to $50B. "We will immediately introduce taxation
measures of the same scale and the same strength," the ministry said. All the economic &
trade achievements previously reached by the 2 parties will no longer
be valid at the same time," the ministry said, calling the US behavior
"short-sighted." In May, Beijing & the US
agreed to "meaningful increases" in US agriculture & energy exports
to China. However, the White House subsequently said it would still
pursue tariffs on Chinese goods that were proposed in Apr, causing
trade relations to deteriorate. Pres Trump said today the US will implement a 25% tariff on $50B worth of goods from China "that contain industrially significant
technologies." "This includes goods
related to China's Made in China 2025 strategic plan to dominate the
emerging high-technology industries that will drive future economic
growth for China, but hurt economic growth for the US &
many other countries," Trump said. The US will "pursue additional tariffs if China engages in retaliatory measures," the statement added. Ahead of Trump's statement, the Chinese Foreign Ministry spokesman told a regular daily news briefing that "if the United States takes
unilateral, protectionist measures, harming China's interests, we will
quickly react and take necessary steps to resolutely protect our fair,
legitimate rights." Back in Apr, Beijing
revealed a list of 106 imports from the US that will be subject to a
25% tariff, including soybeans & cars.
China says tariffs of 'same scale' coming immediately, indicates trade talks will need to start over
The Dow began the day falling to 25K & is now below that important support level. Trump will slap tariffs on some Chinese goods & that is likely to bring on higher tariffs on their exports to the US. Talks have consequences & they are striking home now. REITs are doing well as many have little, if any, direct exposure to higher tariffs, although it's difficult to imagine how changes in the economic environment will affect everybody. Gold was also hit with selling. That money is be going into Treasuries & other "safe haven" assets. The Dow is back to its longer term trend this year of sideways motion under 25K.
Dow Jones Industrials
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