Dow sank 284, decliners over advancers 5-2 & NAZ tumbled 124. The MLP index gained 4 to the 247s & the REIT index was flattish in the 375s. Junk bond funds fluctuated & Treasuries continued to be in demand as stocks were sold. Oil dipped slightly in the 61s & gold went up 2 to 1288.
AMJ (Alerian MLP Index tracking fund)
Stocks fell after Pres Trump sharply increased tariffs on Chinese goods & Beijing vowed retaliation. Trump hiked tariffs on $200B worth of Chinese exports to 25% from 10%, as trade negotiations resume. Shortly after Trump acted, Beijing said it would have to implement “necessary countermeasures.” The Dow was down 0.6%, the S&P 500 fell 0.6% & the NAZ retreated 0.7%. Quarterly earnings season is nearly finished with almost 90% of S&P 500 components reporting. About ¾ of the corps have beaten earnings estimates. Earnings from Jan-Mar are up 1.6% from a year ago, trouncing forecasts for a 2.3% decline. China's Shanghai Composite closed up 3.1%, the Hang Seng was higher by 0.8% & Japan's Nikkei 225 slipped 0.3%. Britain's FTSE 100 was 0.2% higher, France's CAC 40 added 0.3% & Germany's DAX increased 0.5%.
US stocks fall as trade tensions with China rise
Pres Trump said in a tweet storm that he is in no rush to finish trade negotiations with China & that tariffs "will make our country stronger." "Talks with China continue in a very congenial manner - there is absolutely no need to rush," the pres tweeted. Stock futures fell following the tweets, including Dow futures, which dropped 150 points. The tweets came hours after the US increased tariffs on $200B of Chinese products from 10% to 25%. China's Commerce Ministry said immediately after the midnight deadline for the tariff hike that it would retaliate against the American move. Traders were hopeful the US & China would be able to make a resolution before the tariffs went into place today. Chinese Vice Premier Liu He met with top US trade officials yesterday evening in DC, a short time before the tariffs were set to hike. Trade talks are set to continue today despite the tariff increase. "This evening, (United States Trade Representative Robert Lighthizer) and (Treasury Secretary Steven Mnuchin) met with President Trump to discuss the ongoing trade negotiations with China. The Ambassador and Secretary then had a working dinner with Vice Premier Liu He, and agreed to continue discussions tomorrow morning at USTR," White House deputy press secretary Judd Deere said. Trump said in his tweets that in addition to hiking tariffs he will continue to negotiate with China in hopes that they do not again to to "redo" a deal. That referred to his earlier assertion that China had backtracked on nearly all aspects of the trade deal. Stock market futures danced as Trump tweeted this AM. Trump deleted the original tweets, including the one that referenced 'no need to rush,' but then repeated them, adding to the market volatility.
Trump, in tweet storm, says ‘no need to rush’ with China trade deal
US consumer prices rose in April, but underlying inflation remains tame
Stocks began the day lower. Selling continued, bringing the popular average to the lows in the session. The Dow is down almost 1K this week, on track for the worst week in 2019. Nervous investors are buying gold & Treasuries, but not aggressively. Until the trade negotiations are finalized, the bulls will stay on the sidelines.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 61.85 | +0.15 | +0.2% |
| GC=F | Gold | 1 ,286.90 | +1.70 | +0.1% |
Stocks fell after Pres Trump sharply increased tariffs on Chinese goods & Beijing vowed retaliation. Trump hiked tariffs on $200B worth of Chinese exports to 25% from 10%, as trade negotiations resume. Shortly after Trump acted, Beijing said it would have to implement “necessary countermeasures.” The Dow was down 0.6%, the S&P 500 fell 0.6% & the NAZ retreated 0.7%. Quarterly earnings season is nearly finished with almost 90% of S&P 500 components reporting. About ¾ of the corps have beaten earnings estimates. Earnings from Jan-Mar are up 1.6% from a year ago, trouncing forecasts for a 2.3% decline. China's Shanghai Composite closed up 3.1%, the Hang Seng was higher by 0.8% & Japan's Nikkei 225 slipped 0.3%. Britain's FTSE 100 was 0.2% higher, France's CAC 40 added 0.3% & Germany's DAX increased 0.5%.
US stocks fall as trade tensions with China rise
China vowed to retaliate against the US for Pres Trump, sharply hiking tariffs on exports from the world's 2nd-biggest economy, as trade negotiations between the 2 nations
resumed. At midnight the US increased tariffs on $200B worth of Chinese exports to 25% from 10%. Trump
tweeted that the US only sells China approximately $100B in goods & products, which he said is a "very big imbalance." He
also tweeted that if "we bought 15 Billion Dollars of Agriculture from
our Farmers, far more than China buys now, we would have more than 85
Billion Dollars left over for new Infrastructure, Healthcare, or
anything else." Beijing promptly vowed to
retaliate with “necessary countermeasures” in a major escalation of the
year-old trade conflict that has roiled global stock markets &
increased costs for consumers. "China deeply regrets that it will have to take necessary countermeasures," China's Commerce Ministry said The newly increased tariffs took effect on goods that left China on
Fri, meaning that because of the roughly 3 weeks it takes
ocean-going freighters to cross the Pacific Ocean American consumers
will not feel the effect until the end of this month or early next
month.
China vows retaliation against US for higher tariffs as talks continue
Pres Trump said in a tweet storm that he is in no rush to finish trade negotiations with China & that tariffs "will make our country stronger." "Talks with China continue in a very congenial manner - there is absolutely no need to rush," the pres tweeted. Stock futures fell following the tweets, including Dow futures, which dropped 150 points. The tweets came hours after the US increased tariffs on $200B of Chinese products from 10% to 25%. China's Commerce Ministry said immediately after the midnight deadline for the tariff hike that it would retaliate against the American move. Traders were hopeful the US & China would be able to make a resolution before the tariffs went into place today. Chinese Vice Premier Liu He met with top US trade officials yesterday evening in DC, a short time before the tariffs were set to hike. Trade talks are set to continue today despite the tariff increase. "This evening, (United States Trade Representative Robert Lighthizer) and (Treasury Secretary Steven Mnuchin) met with President Trump to discuss the ongoing trade negotiations with China. The Ambassador and Secretary then had a working dinner with Vice Premier Liu He, and agreed to continue discussions tomorrow morning at USTR," White House deputy press secretary Judd Deere said. Trump said in his tweets that in addition to hiking tariffs he will continue to negotiate with China in hopes that they do not again to to "redo" a deal. That referred to his earlier assertion that China had backtracked on nearly all aspects of the trade deal. Stock market futures danced as Trump tweeted this AM. Trump deleted the original tweets, including the one that referenced 'no need to rush,' but then repeated them, adding to the market volatility.
Trump, in tweet storm, says ‘no need to rush’ with China trade deal
US consumer prices rose in Apr but underlying
inflation remained muted, suggesting the Federal Reserve could keep
interest rates unchanged for a while. The Labor Dept said its
Consumer Price Index increased 0.3% last month, lifted by rising
gasoline, rents & health-care costs. The CPI gained 0.4% in Mar. In the 12 months through
Apr, the CPI increased 2.0% after advancing 1.9% in Mar. The forecast called for the CPI increasing 0.4% in Apr &
advancing percent 2.1% year-on-year. Excluding the volatile food &
energy components, the CPI edged up 0.1% as apparel prices dropped for a 2nd straight month. Core CPI has increased by the same
margin for 3 straight months. In the 12 months thru Apr, the core CPI increased 2.1% after gaining 2.0% in Mar. The Fed last week kept interest rates unchanged and signaled little desire to adjust monetary policy anytime soon. Fed Cha Jerome Powell said he believed the recent weak inflation readings "may wind up being transient." The central bank, which has a 2% inflation
target, tracks a different measure, the core personal consumption
expenditures (PCE) price index, for monetary policy. The core PCE price index
increased 1.6% on a year-on-year basis in Mar, the smallest rise in 14
months, after advancing 1.7% in Feb. The Apr PCE price index
data will be published later this month. In Apr, gasoline prices
rose 5.7%, accounting for more than 2/3 of the increase in the
CPI last month, after surging 6.5% in Mar. Food prices dipped 0.1%
in Apr after gaining 0.3% in the prior month. Food consumed at home
dropped 0.5%. But consumers paid more for rent. Owners' equivalent rent
of primary residence, which is what a homeowner would pay to rent or
receive from renting a home, increased 0.3% last month after rising by
the same margin in Mar. Health-care costs
increased 0.3%, matching Mar's gain. Apparel prices declined 0.8% last
month. They plunged 1.9% in Mar, which was the biggest drop since
1949, after the gov introduced a new method & data to
calculate apparel prices. Prices for used motor
vehicles and trucks fell 1.3%, decreasing for a 3rd straight month.
There were decreases in the cost of airline fares, household furnishings & tobacco. The cost of new vehicles ticked up 0.1% after rising 0.4%
in Mar.
US consumer prices rose in April, but underlying inflation remains tame
Stocks began the day lower. Selling continued, bringing the popular average to the lows in the session. The Dow is down almost 1K this week, on track for the worst week in 2019. Nervous investors are buying gold & Treasuries, but not aggressively. Until the trade negotiations are finalized, the bulls will stay on the sidelines.
Dow Jones Industrials
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