Dow dropped 92 (finishing near the lows) after late day selling, decliners over advancers 3-2 & NAZ sank a big 114 (well under 8K again). The MLP index fell 1+ to the 278s & the REIT index was off 3 to the 358s. Junk bond funds inched higher & Treasuries were flattish with yield on the 10 year Treasury at 3%. Oil slid below 69 & gold added 5 to 1205.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Top White House economic advisor Larry Kudlow said that Pres Trump has "not been satisfied" with the trade talks with China & confirmed the administration was readying additional tariffs. "The president has suggested tariffs on a couple $100 billion" in Chinese goods, said Kudlow, the director of the National Economic Council. "He has not been satisfied with the talks with China on this. I think the basic stories are more or less correct. My guess is that an announcement will be coming soon." It was reported earlier that Trump was set to move ahead with tariffs on $200B in Chinese goods. The report followed other reports saying that US officials were trying to restart US-China trade talks. The Dow fell after Kudlow's comments. Investors have been grappling with fears of a global trade war all year as they assess how protectionist trade policies would hurt companies' profits. "I think, in its wisdom, the stock market sees ... the big story here is the change in policies" the Trump administration has brought to DC "and the economic boom," Kudlow said, noting equities remain near an all-time high. The Dow traded less than 2% from its all-time high, while the NAZ & S&P 500 reached record levels late last month. "The tariffs story may be a very good force for good," Kudlow said. "Don't rule that out," he added. "People want to blame President Trump for fixing a broken system, and I think that's unfair," said Kudlow.
China will not be content to only play defense in an escalating trade war with the US, a widely read Chinese tabloid warned, as Pres Trump was expected to announce new tariffs on $200B in Chinese goods as early as today. The US & China have already levied duties on $50B worth of each other's goods in an intensifying row that has jolted global financial markets in the past few months. Last week, the Treasury Dept invited senior Chinese officials, including Vice Premier Liu He, to more talks on the tariff dispute, though scepticism remained high among trade observers on both sides over the prospects of a breakthrough. China's Foreign Ministry reiterated that the escalation of the trade conflict was not in anyone's interest. "We have always maintained that the only correct means to resolve the trade dispute is through dialogue and consultation on an equal basis with mutual trust and respect," a ministry spokesman said during a regular news briefing. A senior administration official said that Trump was likely to announce the new tariffs as early as today. "It is nothing new for the U.S. to try to escalate tensions so as to exploit more gains at the negotiating table," the Global Times, which is published by the ruling Communist Party's People's Daily, wrote in an editorial. "We are looking forward to a more beautiful counter-attack and will keep increasing the pain felt by the U.S.," the Chinese-language column added. Besides retaliating with tariffs, China could also restrict export of goods, raw materials & components core to US manufacturing supply chains, former finance minister Lou Jiwei said.
China warns it won't just play defense in a trade war with the US
Factories in the NY region churned out goods at a slower but still-flourishing pace in Sep, a survey of executives showed. The Empire State manufacturing index fell 19 points in Sep from a 25.6 reading in Aug that was a 10-month high. The forecast called for the index to come in at 23. The index for new orders slipped 0.6 points to 16.5 & the shipments index dropped 11.4 points to 14.3. A measure of what it costs to buy raw & partly finished goods inched up to 46.3 from 45.2, the NY Fed said. That reflects upward pressure on a variety of materials firms need to produce their goods. Manufacturers remained optimistic about future growth, though a little less so. The index measuring expectations 6 months from now dropped to 30.3 from 34.8. The index is the first of several regional manufacturing surveys released each month. They are frequently volatile but taken together, they present one of the timeliest reads on a critically important part of the economy. The US economy is booming. Growth surged in the spring & has carried thru summer. Like most other companies, manufacturers say one of their biggest problems is finding enough skilled workers to fill a high number of job openings. Many companies say they plan to add more workers or increase hours for current employees & in some cases, they are raising wages. US tariffs & foreign retaliatory measures, meanwhile, have also made it harder to obtain a steady source of supplies at reasonable prices. Higher labor & material costs could crimp profits or force companies to pass on price increases to customers.
Selling picked up in the PM on fears of an announcement being made later today about higher tariffs on China goods. Traders are nervous & they are selling. Additionally, sexy tech stocks are under fire as gov officials are taking a closer look at their business models which make they look like monopolies that need regulation. The bulls are having a tough time making their case for extending the stock market rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Farmers worry about falling crop prices & lost
sales overseas, manufacturers fear rising costs & new foreign taxes on
their exports & American allies overseas are furious. By
any conventional gauge, Pres Trump's uncompromising stance
toward tariffs & the pain they've begun to cause US individuals &
companies so close to midterm elections would seem politically reckless.
Yet Trump appears to be betting that his combative actions will soon
benefit the country & prove a political winner. Ditching
decades of US trade policy that he says swindled America & robbed
its workers, Trump insists he can save US jobs & factories by
abandoning or rewriting trade deals, slapping taxes on imports &
waging a brutal tariff war with China, America's biggest trading
partner. "Prior presidents in both political
parties have never really moved to try to help and protect the American
economy and its workforce, its farmers, its manufacturing workers, in a
way of creating a level playing field," Larry Kudlow, the top White
House economic adviser, said. "They give it lip
service, and then they back off. This president has no intention of
backing off. None. Zero." Trump's apparent belief is that he &
congressional Reps can rely on the unswerving support of core GOP
voters, even in rural areas that have been economically hurt by his
trade disputes, & maybe succeed in delivering better trade deals
before Election Day. Still, as an insurance policy against failure, the
administration is providing $12B in farm aid to soothe trade-war
wounds in rural America. All told, it's a high-risk political gamble. The
US & China have imposed import taxes on $50B worth of each
other's products in a rumble over American allegations that Beijing uses
predatory tactics to acquire foreign trade secrets & to try to
overtake America's global supremacy in high technology. Over the
weekend, news reports indicated that the administration is set to
announce tariffs on $200B more in Chinese imports, a step that
that would significantly escalate the trade war between the world's 2
largest economies. Beijing has said it would swiftly retaliate against
additional US tariffs. Caught in the
crossfire are US soybean farmers, a prime target of Beijing's
retaliatory tariffs, whose exports to China account for about 60%
of their overseas sales. These tariffs make US soybeans prohibitively
expensive in China. That means lost sales for American farmers. Separately
Trump has enraged US allies like Canada & the EU by
declaring their steel & aluminum a threat to America's national
security as justification for slapping taxes on them. On
yet another trade front, the pres would raise the stakes
considerably if he carries out a threat to tax $340B in imported
cars, trucks & auto parts, action that would raise prices for
vehicles Americans buy. What's more, Trump has
threatened to kick Canada out of a North American trade bloc if it
doesn't cave in to pressure to open its dairy market, among other
things. Trump is running into resistance in
pockets across the country. American farmers who rely on exports are
facing retaliation from US trading partners, which depresses export
sales & prices of agricultural commodities. Manufacturers that buy
steel & aluminum are being hurt by higher prices & supply shortages
resulting from the tariffs on imported metals. Corps
fear that Trump's drive to rewrite the North American Free Trade
Agreement will disrupt the supply chains that they've spent the past 24
years building across the US, Canada & Mexico. If the trade
war with China further escalates, consumers would face higher prices at
the mall & online. The affected imports would range from handbags,
luggage & textiles to a range of consumer electronics, including the
Apple (AAPL) Watch & adapters, cables & chargers. Approval for Trump's performance is still running at 53% in rural
areas, compared with 39% overall, according to an NPR/Marist
poll released last week. Even if they're worried about the trade
disputes, many rural Americans support Trump's stands on social issues
such as immigration, a sign that the pres may have enough
political leeway to drive forward with his hard line on trade.
As midterms near, Trump gambles on his hardline trade policy
Top White House economic advisor Larry Kudlow said that Pres Trump has "not been satisfied" with the trade talks with China & confirmed the administration was readying additional tariffs. "The president has suggested tariffs on a couple $100 billion" in Chinese goods, said Kudlow, the director of the National Economic Council. "He has not been satisfied with the talks with China on this. I think the basic stories are more or less correct. My guess is that an announcement will be coming soon." It was reported earlier that Trump was set to move ahead with tariffs on $200B in Chinese goods. The report followed other reports saying that US officials were trying to restart US-China trade talks. The Dow fell after Kudlow's comments. Investors have been grappling with fears of a global trade war all year as they assess how protectionist trade policies would hurt companies' profits. "I think, in its wisdom, the stock market sees ... the big story here is the change in policies" the Trump administration has brought to DC "and the economic boom," Kudlow said, noting equities remain near an all-time high. The Dow traded less than 2% from its all-time high, while the NAZ & S&P 500 reached record levels late last month. "The tariffs story may be a very good force for good," Kudlow said. "Don't rule that out," he added. "People want to blame President Trump for fixing a broken system, and I think that's unfair," said Kudlow.
China will not be content to only play defense in an escalating trade war with the US, a widely read Chinese tabloid warned, as Pres Trump was expected to announce new tariffs on $200B in Chinese goods as early as today. The US & China have already levied duties on $50B worth of each other's goods in an intensifying row that has jolted global financial markets in the past few months. Last week, the Treasury Dept invited senior Chinese officials, including Vice Premier Liu He, to more talks on the tariff dispute, though scepticism remained high among trade observers on both sides over the prospects of a breakthrough. China's Foreign Ministry reiterated that the escalation of the trade conflict was not in anyone's interest. "We have always maintained that the only correct means to resolve the trade dispute is through dialogue and consultation on an equal basis with mutual trust and respect," a ministry spokesman said during a regular news briefing. A senior administration official said that Trump was likely to announce the new tariffs as early as today. "It is nothing new for the U.S. to try to escalate tensions so as to exploit more gains at the negotiating table," the Global Times, which is published by the ruling Communist Party's People's Daily, wrote in an editorial. "We are looking forward to a more beautiful counter-attack and will keep increasing the pain felt by the U.S.," the Chinese-language column added. Besides retaliating with tariffs, China could also restrict export of goods, raw materials & components core to US manufacturing supply chains, former finance minister Lou Jiwei said.
China warns it won't just play defense in a trade war with the US
Factories in the NY region churned out goods at a slower but still-flourishing pace in Sep, a survey of executives showed. The Empire State manufacturing index fell 19 points in Sep from a 25.6 reading in Aug that was a 10-month high. The forecast called for the index to come in at 23. The index for new orders slipped 0.6 points to 16.5 & the shipments index dropped 11.4 points to 14.3. A measure of what it costs to buy raw & partly finished goods inched up to 46.3 from 45.2, the NY Fed said. That reflects upward pressure on a variety of materials firms need to produce their goods. Manufacturers remained optimistic about future growth, though a little less so. The index measuring expectations 6 months from now dropped to 30.3 from 34.8. The index is the first of several regional manufacturing surveys released each month. They are frequently volatile but taken together, they present one of the timeliest reads on a critically important part of the economy. The US economy is booming. Growth surged in the spring & has carried thru summer. Like most other companies, manufacturers say one of their biggest problems is finding enough skilled workers to fill a high number of job openings. Many companies say they plan to add more workers or increase hours for current employees & in some cases, they are raising wages. US tariffs & foreign retaliatory measures, meanwhile, have also made it harder to obtain a steady source of supplies at reasonable prices. Higher labor & material costs could crimp profits or force companies to pass on price increases to customers.
Manufacturers grow at slower but still rapid pace in September, Fed’s Empire survey shows
Selling picked up in the PM on fears of an announcement being made later today about higher tariffs on China goods. Traders are nervous & they are selling. Additionally, sexy tech stocks are under fire as gov officials are taking a closer look at their business models which make they look like monopolies that need regulation. The bulls are having a tough time making their case for extending the stock market rally.
Dow Jones Industrials
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