Dow sank 315, decliners over advancers about 3-1 & NAZ tumbled 155. The MLP index fell 2+ to the 241s & the REIT index went up 1+ to 390. Junk bond funds slid lower & Treasuries remained in demand. Oil rebounded 1+ to the 55s & gold jumped up 26 to 1459 (a 6 year high).
AMJ (Alerian MLP Index tracking fund)
Stocks pressured by US-China trade tensions
The tit-for-tat trade war continues as China has threatened to retaliate if Pres Trump's planned tariff hikes go ahead. Trump ratcheted things up yesterday with the announcement of 10% tariffs on $300B of Chinese imports, effective Sep 1. Trump's announcement surprised investors after the White House said Beijing promised to buy more farm goods. It came as their latest trade talks ended in Shanghai with no sign of a deal. The news sent US stock markets into a reversal, plunging before trading ended for the day. The next round of trade talks between the US & China are scheduled for Sep & would be extended to everything the US buys from China. China's gov accused Trump of violating his Jun agreement with Pres Xi Jinping to revive negotiations aimed at ending a costly fight over Beijing's trade surplus & technology ambitions. If that goes ahead, "China will have to take necessary countermeasures to resolutely defend its core interests," said a foreign ministry spokeswoman, Hua Chuying. The US & Beijing are locked in a battle over complaints China steals or pressures companies to hand over technology. The Trump administration worries American industrial leadership might be threatened by Chinese plans for gov-led creation of global competitors in robotics & other technologies. Europe & Japan echo US complaints those plans violate Beijing's market-opening commitments. TYhe US earlier imposed 25% tariffs on $250B in Chinese products & Beijing has retaliated by raising import duties on $110B of US goods.
China threatens retaliation for Trump's planned tariff hike
Trump: 'We will be taxing the hell out of China' until a trade deal is reached
Tariff wars are driving buyers away from stocks. The Dow opened lower & continue to drop. Now it's 1K below the record reached in mid Jul. The outlook is dreary. Good news on the tariff war looks far, far away & then there's the uncertainty about the Fed's next move on interest rates. Gold is at its highest since 2013. Aug is shaping up to be a dreary month.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 55.60 | +1.65 | +3.1% |
| GC=F | Gold | 1,451.10 | +18.70 | +1.3% |
Stocks added to declines after Pres Trump's announcement that additional tariffs will be put on Chinese goods. The Dow was down more than 200. Investors are also dissecting the Jul jobs report which showed 164K nonfarm jobs were created in July, in line with expectations. The unemployment rate held steady at 3.7%. Trump ratcheted things up yesterday with a surprise announcement of 10% tariffs on $300B of Chinese imports, effective Sep 1. That sent stocks plunging with the Dow ending down 280. The tit-for-tat trade war continues as China has threatened to retaliate if Pres Trump's planned tariff hikes go ahead. Trump's
announcement surprised investors after the White House said Beijing
promised to buy more farm goods. It came as their latest trade talks
ended in Shanghai with no sign of a deal. The next round of trade talks between the US & China are scheduled for Sep. The
news roiled Asian markets, China's Shanghai fell 1.4%, Hong
Kong's Hang Seng dropped more than 2% & Japan's Nikkei hit a 6-week low with a loss of 2.1%. In Europe, London's FTSE was down 2.2%, Germany's DAX dropped 2.8% & France's CAC lost 3.1%. The tariff news also led to an 8% drop in oil. US crude was trading another 3% lower today.
Stocks pressured by US-China trade tensions
US employers added 164K jobs in Jul, in line with expectations — a fairly unnoteworthy number, but evidence that the
record-long economic expansion is continuing to chug along at a healthy
pace. The unemployment rate remained steady at
3.7%, near a 50-year-low, while the labor force participation
rate was also little unchanged at 63%. Average hourly earnings,
meanwhile, rose by 8¢ to $27.98. Over the year, average hourly
earnings have increased by 3.2%, slightly beating expectations of
3.1% growth but continuing to disappoint. For
an economy with historically low unemployment, wage growth continues to
fall short of expectations. It's not a new development for the US
economy, however: Since 1979, productivity has risen 6 times faster
than hourly compensation for the typical US worker. Plus, analysts
caution that the greatest salary gains are going to already high-earning
employees. The number of positions the US added in
Jun dropped to 193K, down from a previously reported 224K,
according to revised data from the Bureau of Labor Statistics. Today's
report comes after strong private sector growth in Jul, with employers
adding a solid 219K jobs. Investors who wanted to see cause for a 2nd interest rate cut by the Federal Reserve will likely be
disappointed by the middle-of-the-road report. Although
Fed Chair Jerome Powell said it was not the start of a “long series
of rate cuts,” he also noted, “I didn’t say it was just one, or anything
like that.” Policymakers, Powell said, will continue to monitor the
economic outlook to determine whether a rate cut is warranted at the
Fed’s September meeting. "The issue is more the downside risks and the shortfall in inflation,"
Powell added. "We’re trying to address those.
In addition, going forward, I would say, we’re going to be monitoring
those same things, the evolution of trade uncertainty, of global growth
and of low inflation. We’ll also, of course, be watching the performance
of the U.S. economy ... We’ll be putting all of those together, and
that’s how we’ll be thinking of policy going forward."
US job growth remains steady in July with 164,000 added
The tit-for-tat trade war continues as China has threatened to retaliate if Pres Trump's planned tariff hikes go ahead. Trump ratcheted things up yesterday with the announcement of 10% tariffs on $300B of Chinese imports, effective Sep 1. Trump's announcement surprised investors after the White House said Beijing promised to buy more farm goods. It came as their latest trade talks ended in Shanghai with no sign of a deal. The news sent US stock markets into a reversal, plunging before trading ended for the day. The next round of trade talks between the US & China are scheduled for Sep & would be extended to everything the US buys from China. China's gov accused Trump of violating his Jun agreement with Pres Xi Jinping to revive negotiations aimed at ending a costly fight over Beijing's trade surplus & technology ambitions. If that goes ahead, "China will have to take necessary countermeasures to resolutely defend its core interests," said a foreign ministry spokeswoman, Hua Chuying. The US & Beijing are locked in a battle over complaints China steals or pressures companies to hand over technology. The Trump administration worries American industrial leadership might be threatened by Chinese plans for gov-led creation of global competitors in robotics & other technologies. Europe & Japan echo US complaints those plans violate Beijing's market-opening commitments. TYhe US earlier imposed 25% tariffs on $250B in Chinese products & Beijing has retaliated by raising import duties on $110B of US goods.
China threatens retaliation for Trump's planned tariff hike
Pres Trump stood fast by his decision to implement 10%
tariffs on an additional $300B worth of goods coming into the
US from China, saying the pain will continue for Beijing
until an agreement is struck. “Until such time as there is a deal, we will be taxing the hell out of China,” Trump said. The US announced the latest round of tariffs as
negotiations have stalled as US representatives returned home from meeting with the
delegation in Shanghai. Trump said earlier that China
decided to renegotiate the deal before signing, & had agreed to buy
more agricultural products from the US – but has yet to follow thru
on that promise. And
10% could just be the beginning, Trump warned. He said that he could "always do much more" or he could "do less"
with respect to tariffs, depending on what happens with the trade
negotiations. He added the 10% rate could be lifted in stages to
"well beyond 25 percent," though his administration is not necessarily
looking to do In reaction to the tariffs, Chinese sources said that the directive in Beijing is to
“decouple” from its reliance on the US economy. When it comes to
intellectual property, US representatives were told that they would
have to trust that China would honor its promise to protect it – but the
US wants an enforceable deal. Trump also
said that because China devalues their currency & “pours money into
their system,” Americans aren't paying for the tariffs; the Chinese are
instead. The
pres has noted that this round of tariffs could hit
large US corps. He told companies yesterday to
make their products in the US if they don't want to be impacted. Trump
sounded an optimistic note about trade discussions earlier in the day,
classifying the dialogue as "positive" & the future as "very bright."
The White House said negotiations will continue in DC next
month.
Trump: 'We will be taxing the hell out of China' until a trade deal is reached
Tariff wars are driving buyers away from stocks. The Dow opened lower & continue to drop. Now it's 1K below the record reached in mid Jul. The outlook is dreary. Good news on the tariff war looks far, far away & then there's the uncertainty about the Fed's next move on interest rates. Gold is at its highest since 2013. Aug is shaping up to be a dreary month.
Dow Jones Industrials
No comments:
Post a Comment