Dow dropped 134, but advancers over decliners about 3-2 amp; NAZ fell 29. The MLP index shot up 6+ to the 274s & the REIT index climbed 3+ to the 353s. Junk bond funds slid lower & Treasuries were in demand after Trump's comments about the Fed (more below). Oil remained higher, going to the 69s, & gold pared losses, down 5 to 1222.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The EU is making a retaliation list to strike back if the US hits European cars with tariffs
In a stinging & historically rare criticism, Pres Trump expressed frustration with the Federal Reserve & said the central bank could disrupt the economic recovery. Presidents rarely intercede when it comes to the Fed, which sets the benchmark interest rate that flows through to many types of consumer debt. Fed officials, including Chair Jerome Powell, have raised interest rates twice this year & have pointed to 2 more before the end of 2018. Trump said he does not approve, even though he said he "put a very good man in" at the Fed in Powell. “I’m not thrilled,” he added in an interview. “Because we go up and every time you go up they want to raise rates again. I don't really — I am not happy about it. But at the same time I’m letting them do what they feel is best.” “But I don’t like all of this work that goes into doing what we’re doing.” Markets rected to these comments, with stocks, the $ & Treasury yields all falling. The White House, in a statement, emphasized that Trump did not mean to influence the Fed's decision-making process. "Of course the President respects the independence of the Fed. As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions " the statement said. “The President’s views on interest rates are well known and his comments today are a reiteration of those long held positions, and public comments." Trump helped usher thru a massive tax cut late last year that slashed the corp rate from 35% to 21% & lowered marginal rates across the board. In return, there has been powerful stock market gains & an economy on pace to grow nearly 3% in 2018, well above its post-recession rate before he took office. Powell has said he believes the economy is strong enough for the Fed to continue on its path of normalizing rates, which were held at a historically low level during the recovery. Still, Trump said he’s concerned that the timing may be poor and that it will put the US at a “disadvantage” while the Fed's counterparts like the ECB & the Bank of Japan maintain loose monetary policy. The pres acknowledged that his comments are unusual but said he doesn't care. “Now I’m just saying the same thing that I would have said as a private citizen,” he added. “So somebody would say, ‘Oh, maybe you shouldn’t say that as president.' I couldn’t care less what they say, because my views haven’t changed.” “I don’t like all of this work that we’re putting into the economy and then I see rates going up,” he said.
Trump lays into the Fed, says he's 'not thrilled' about interest rate hikes
While Trump's comments that he wasn't thrilled with rate hikes were unsettling, the stock market took it all in stride. Stocks continued to slosh around depressed levels. Earnings from eBay (EBAY) & Dow stock American Express (AXP) were additional depressants. The early reports tend to be the strongest while later ones lag. The Dow closed just above 25K on Fri the 13th & has been little changed this week. Investors have redirected their interest to Treasuries, but not gold. Meanwhile tariff talks are stuck in the mud, as expected.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Peter Navarro, one of Pres Trump's top trade advisors, said that China is in a "zero-sum game" with the rest of the world when it comes to trade. He argued that the US needs to protect its interests in rapidly developing technologies. "This is our future,"
Navarro said, citing artificial intelligence, robotics & high-tech
industries – all of which are Chinese priorities for the next decade, as
well. "Unfortunately, it's a zero-sum
game now between China and the rest of the world, and what we need to do
as a country is to work with the rest of the world" to ensure
prosperity & high stock markets, he added. Navarro is known for his
hawkish economic stances on China. Under Trump, the US has engaged in
an escalating trade war with China, as both nations have imposed and
threatened B$ of tariffs on each other's products. "We have to defend
ourselves," Navarro said, citing alleged Chinese theft of US
intellectual property on technology. "They're attacking our crown
jewels. They make no bones about it." Recently, Trump
threatened to impose new tariffs on $200B of products from China
as the US pushes the Asian country to take a harder line on protecting
intellectual property, particularly for technology. Larry Kudlow, Trump's top economic advisor, said yesterday that Chinese Pres Xi Jinping was holding up progress & refusing to budge over his country's trade policies. In turn. China's Foreign Ministry denounced Kudlow'' remarks as "bogus" & "beyond imagination.
Trump trade advisor Peter Navarro: 'Zero-sum game' between China and the rest of the world
The Commerce Dept is holding 2 days of hearings on whether the US should raise tariffs on vehicles built in Europe & sold in the US. The US currently has a $32B auto trade deficit with Europe, meaning Americans buy $32B more in European cars than US automakers sell back to consumers in the EU. Automakers such as BMW & Mercedes also built vehicles in US factories, especially popular crossovers & SUVs. Reports have recently surfaced that the EU is prepared to lower tariffs on US imports. The Trump administration has threatened to raise tariffs on cars imported from Europe from 2.5% to 20%. It already has placed tariffs on $34B in Chinese imports.
Commerce department opens hearings on auto tariffs
Automakers push back on EU tariff plan, saying there's no evidence imports affect national security
Trump trade advisor Peter Navarro: 'Zero-sum game' between China and the rest of the world
The Commerce Dept is holding 2 days of hearings on whether the US should raise tariffs on vehicles built in Europe & sold in the US. The US currently has a $32B auto trade deficit with Europe, meaning Americans buy $32B more in European cars than US automakers sell back to consumers in the EU. Automakers such as BMW & Mercedes also built vehicles in US factories, especially popular crossovers & SUVs. Reports have recently surfaced that the EU is prepared to lower tariffs on US imports. The Trump administration has threatened to raise tariffs on cars imported from Europe from 2.5% to 20%. It already has placed tariffs on $34B in Chinese imports.
Commerce department opens hearings on auto tariffs
Auto executives pushed back on the Trump
administration's proposal to dramatically raise tariffs on auto imports
from the EU. Industry executives, testifying at the Commerce Dept hearing,
warned against the tariffs. They said new tariffs would hurt US jobs,
raise prices for consumers & invite the EU to retaliate
with import taxes of its own. "We are the leading
export sector in the U.S. economy," said former Missouri Gov. Matt
Blunt, who is currently pres of the American Automotive Policy
Council, adding that China & Europe each receive about 250K
US-made vehicles each year. "That is a number that can grow," he added. Japanese automaker Toyota (TM) said employees from 10 of its US assembly plants were protesting the
tariffs in DC. TM exports 8 of its
US-made models to 31 countries. The US currently imposes a 2.5% tariff on cars imported from Europe. Pres Trump has said he wants to raise that to 20%. There already is a 25% tariff on imported pickup trucks that dates back several
decades. The administration has
justified raising the tax penalties by invoking Section 232 of the Trade
Expansion Act of 1962, which gives the administration the ability to
investigate the potential effect of imports on national security &
curb those that pose a threat. Using national security to penalize automotive imports is highly unusual, but Commerce Secretary Wilbur Ross has said that national security is connected to US economic security. Ross said in opening remarks today that it is "too soon" to determine whether the US will raise tariffs. Commerce Dept
officials expressed some concern about the nation's roughly $32B
auto trade deficit with Europe, meaning Americans buy $32B more
in European cars than US automakers sell back to EU consumers. The
Trump administration has already imposed tariffs on B$
of imports from China, including vehicles & parts. Labor officials from the
United Auto Workers union testified that a "comprehensive investigation"
into the US trade deficit with other countries is "long overdue," &
said that trade has hurt American workers in many ways over the last
several decades. Industry analysts from
the Center for Automotive Research said in a recent paper that tariffs
on US imports of automobiles & automotive parts will raise prices of
all new vehicles $455-6875 apiece, "depending on the level of
tariff or quota, where the vehicle was assembled, and whether the policy
provides exemptions for automotive trade with Canada and Mexico." Several foreign
automakers from Japan, Germany & other countries, operate plants in
the US where vehicles are made for both the US market & for export
to other countries
Automakers push back on EU tariff plan, saying there's no evidence imports affect national security
The EU is making a list of goods it
could target as a way to retaliate against potential tariffs on European
cars, an EU official said. "If the U.S. would impose these car
tariffs, that would be very unfortunate. We are preparing together with
our member states a list of rebalancing measures there as well. And we
have made that clear to our American partners," Trade Commissioner
Cecilia Malmstrom said in Brussels. "It is done in the same way as with steel and aluminum," she added. Malmstrom's comments come after Pres Trump threatened to hike tariffs on European car imports to 20% from
2.5% last month. They also come ahead of a meeting between Trump & European Commission Pres Jean-Claude Juncker in DC. They are scheduled to meet next week to discuss trade between the US & Europe. Earlier this week, it was reported that Juncker will likely convey to Trump the EU's willingness to lower auto tariffs between the 2 sides & other major car-exporting countries. Tensions on the trade
front between the US & Europe have risen lately. The US has
slapped charges on steel & aluminum imports coming from Europe, while
the EU has retaliated with tariffs on $3.25B worth of US
exports, including bourbon & motorcycles.
The EU is making a retaliation list to strike back if the US hits European cars with tariffs
In a stinging & historically rare criticism, Pres Trump expressed frustration with the Federal Reserve & said the central bank could disrupt the economic recovery. Presidents rarely intercede when it comes to the Fed, which sets the benchmark interest rate that flows through to many types of consumer debt. Fed officials, including Chair Jerome Powell, have raised interest rates twice this year & have pointed to 2 more before the end of 2018. Trump said he does not approve, even though he said he "put a very good man in" at the Fed in Powell. “I’m not thrilled,” he added in an interview. “Because we go up and every time you go up they want to raise rates again. I don't really — I am not happy about it. But at the same time I’m letting them do what they feel is best.” “But I don’t like all of this work that goes into doing what we’re doing.” Markets rected to these comments, with stocks, the $ & Treasury yields all falling. The White House, in a statement, emphasized that Trump did not mean to influence the Fed's decision-making process. "Of course the President respects the independence of the Fed. As he said he considers the Federal Reserve Board Chair Jerome Powell a very good man and that he is not interfering with Fed policy decisions " the statement said. “The President’s views on interest rates are well known and his comments today are a reiteration of those long held positions, and public comments." Trump helped usher thru a massive tax cut late last year that slashed the corp rate from 35% to 21% & lowered marginal rates across the board. In return, there has been powerful stock market gains & an economy on pace to grow nearly 3% in 2018, well above its post-recession rate before he took office. Powell has said he believes the economy is strong enough for the Fed to continue on its path of normalizing rates, which were held at a historically low level during the recovery. Still, Trump said he’s concerned that the timing may be poor and that it will put the US at a “disadvantage” while the Fed's counterparts like the ECB & the Bank of Japan maintain loose monetary policy. The pres acknowledged that his comments are unusual but said he doesn't care. “Now I’m just saying the same thing that I would have said as a private citizen,” he added. “So somebody would say, ‘Oh, maybe you shouldn’t say that as president.' I couldn’t care less what they say, because my views haven’t changed.” “I don’t like all of this work that we’re putting into the economy and then I see rates going up,” he said.
Trump lays into the Fed, says he's 'not thrilled' about interest rate hikes
While Trump's comments that he wasn't thrilled with rate hikes were unsettling, the stock market took it all in stride. Stocks continued to slosh around depressed levels. Earnings from eBay (EBAY) & Dow stock American Express (AXP) were additional depressants. The early reports tend to be the strongest while later ones lag. The Dow closed just above 25K on Fri the 13th & has been little changed this week. Investors have redirected their interest to Treasuries, but not gold. Meanwhile tariff talks are stuck in the mud, as expected.
Dow Jones Industrials
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