Dow slumped 231, decliners over advancers 3-1 & NAZ sank 91. The MLP index was fractionally lower to the 247s & the REIT index fell 3 to the 279s. Junk bond funds crawled higher & Treasuries rose while stocks were being sold. Oil slid back in the 71s & gold gave back 1 to 1279.
AMJ (Alerian MLP Index tracking fund)
China said its negotiators are still preparing to travel to the US for trade talks this week despite Pres Trump threatening Beijing with increased tariffs. That wasn’t quite a confirmation that the talks would still go on, but it quieted some concern following multiple reports that the Chinese side was reconsidering its involvement in the negotiations. Trump said that the current 10% tariffs on $200B worth of Chinese goods wil rise to 25% on Fri. He also threatened to impose 25% levies on an additional $325B of Chinese goods “shortly.” Chinese Vice Premier Liu He had planned to bring a large delegation to DC on Wed to hash out a trade deal, & there'd been talk in recent days that something resembling a deal could result. Instead, leakers briefed on the talks said the Chinese side may be weighing backing out of this week's negotiations. That was pegged to Trump's new threats, they said, which abandon a 6-month truce after Beijing waffled on some previously discussed commitments. One source had said the Chinese vice premier would likely cancel the trip he'd planned for himself & a 100-person delegation for the final round of talks that US officials had previously said could yield a deal by Fri. Chinese officials canceled a trip in late Sep 2018 in similar circumstances. A 2nd source said Trump's decision to more than double the tariff rate on $200B of goods was meant to send a message to Liu to not come to the US with more “empty offers.” During a news conference today, a spokesman for China's Ministry of Foreign Affairs said that the country's team “is preparing to travel to the U.S. for the trade talks.” He did not confirm whether Liu would be among that group. The spokesman would not elaborate on the number of people on the Chinese team, the length of the trip, or the date of departure. The spokesman also emphasized that such back-&-forth in the trade negotiations have happened before, & that the latest round of talks saw “positive” progress.
China says it’s still preparing for US trade talks — but won’t give details after new Trump …
Philadelphia Fed Pres Patrick Harker said that recent weaker inflation data has not altered his view that the appropriate path of monetary policy would be for one interest-rate hike, at most, this year. While inflation has softened, Harker said he suspect some of the weakness is "transitory," & he still expects it will run slightly above the Fed's 2% target over the medium term. "If any component of the outlook were to affect my view on the appropriate path of monetary policy, it would be inflation. However we're not there yet," he said, in a speech. The Philadelphia Fed pres, who is not a voting FOMC member this year, said the strong Q1 GDP reading was a "pleasant surprise," but added that it is possible the drag usually seen in Q1s in recent years will show up in Q2. For now, Harker said he was sticking with his view that the economy will grow "a little above 2%" this year.
Stocks plunged at the opening on fears that the US-China trade talks appear to be in jeopardy. Confusion reigns about where these talks are going. However they have dragged on for months with only vague promises about getting a signed deal. Early losses in the Dow have been cut in ½ as a limited sense of calm is returning to traders. Treasuries are being purchased although gold, another safe haven investment, is flattish. The Dow is still only about 2% under its record high made last year. Not bad!!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 61.77 | - 0.17 | - 0.3% |
| GC=F | Gold | 1,279.90 | -1.40 | -0.11% |
The Dow tumbled after Pres Trump threatened to increase tariffs sharply this week on a wide range of Chinese goods because trade talks are not advancing quickly enough. Trump,
in a pair of tweets yesterday, said he would increase tariffs to 25% from the current 10% on $200B of Chinese goods. Today, the pres tweeted that the US loses $500B a year
to China. Chinese
authorities said, despite the threat, that they would still send a
large delegation to the US to continue talks aimed at resolving the
one-year standoff between the world's 2 biggest economies.
However, the trip to DC was pulled from the official calendar of
Vice Premier Liu He, indicating he had canceled the trip. On 2 previous occasions, Trump has pushed back deadlines, in Jan & Mar, to raise the tariffs to buy more time for a negotiated
settlement. But yesterday, Trump, who has called himself a "tariff man,"
said he's losing patience. "The Trade Deal with China continues, but
too slowly, as they attempt to renegotiate. No!" Trump tweeted. Liu could depart Beijing for DC this
Thurs, 3 days later than had been scheduled, & then leave DC a day later. The 3 major averages experienced their heaviest selling since Mar 22 & 29 for the Dow, which was lower right after the opening
bell.
Dow plummets after Trump threatens bigger China tariffs
China said its negotiators are still preparing to travel to the US for trade talks this week despite Pres Trump threatening Beijing with increased tariffs. That wasn’t quite a confirmation that the talks would still go on, but it quieted some concern following multiple reports that the Chinese side was reconsidering its involvement in the negotiations. Trump said that the current 10% tariffs on $200B worth of Chinese goods wil rise to 25% on Fri. He also threatened to impose 25% levies on an additional $325B of Chinese goods “shortly.” Chinese Vice Premier Liu He had planned to bring a large delegation to DC on Wed to hash out a trade deal, & there'd been talk in recent days that something resembling a deal could result. Instead, leakers briefed on the talks said the Chinese side may be weighing backing out of this week's negotiations. That was pegged to Trump's new threats, they said, which abandon a 6-month truce after Beijing waffled on some previously discussed commitments. One source had said the Chinese vice premier would likely cancel the trip he'd planned for himself & a 100-person delegation for the final round of talks that US officials had previously said could yield a deal by Fri. Chinese officials canceled a trip in late Sep 2018 in similar circumstances. A 2nd source said Trump's decision to more than double the tariff rate on $200B of goods was meant to send a message to Liu to not come to the US with more “empty offers.” During a news conference today, a spokesman for China's Ministry of Foreign Affairs said that the country's team “is preparing to travel to the U.S. for the trade talks.” He did not confirm whether Liu would be among that group. The spokesman would not elaborate on the number of people on the Chinese team, the length of the trip, or the date of departure. The spokesman also emphasized that such back-&-forth in the trade negotiations have happened before, & that the latest round of talks saw “positive” progress.
China says it’s still preparing for US trade talks — but won’t give details after new Trump …
Philadelphia Fed Pres Patrick Harker said that recent weaker inflation data has not altered his view that the appropriate path of monetary policy would be for one interest-rate hike, at most, this year. While inflation has softened, Harker said he suspect some of the weakness is "transitory," & he still expects it will run slightly above the Fed's 2% target over the medium term. "If any component of the outlook were to affect my view on the appropriate path of monetary policy, it would be inflation. However we're not there yet," he said, in a speech. The Philadelphia Fed pres, who is not a voting FOMC member this year, said the strong Q1 GDP reading was a "pleasant surprise," but added that it is possible the drag usually seen in Q1s in recent years will show up in Q2. For now, Harker said he was sticking with his view that the economy will grow "a little above 2%" this year.
Fed's Harker continues to see one interest-rate hike, at most, this year
Stocks plunged at the opening on fears that the US-China trade talks appear to be in jeopardy. Confusion reigns about where these talks are going. However they have dragged on for months with only vague promises about getting a signed deal. Early losses in the Dow have been cut in ½ as a limited sense of calm is returning to traders. Treasuries are being purchased although gold, another safe haven investment, is flattish. The Dow is still only about 2% under its record high made last year. Not bad!!
Dow Jones Industrials
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