Markets cut losses after Trump pauses tariffs on Mexico

Dow was off 31, decliners over advancers about 2-1 & NAZ dropped 190.  The MLP index rose 2+ to 321 & the REIT index was unchanged in the 402s.  Junk bond funds slid lower & Treasuries were in demand, lowering yields (more below).  Oil was up pennies in the 72s & gold jumped 24 to 2859 for yet another record!

Dow Jones Industrials

Beijing is threatening to retaliate against the US as Pres Trump's 10% tariffs on China are expected to take effect tomorrow.  The White House announced on Sat that the Trump administration is implementing a 25% additional tariff on imports from Canada & Mexico & a 10% additional tariff on imports from China, in a move intended to hold the 3 countries "accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country."  Namely with Beijing, the White House said Chinese officials "have failed to take the actions necessary to stem the flow of precursor chemicals to known criminal cartels and shut down money laundering by transnational criminal organizations."  A spokesperson for the Chinese Foreign Ministry said that the 10% tariffs were being levied "under the pretext of the fentanyl issue."  "China firmly deplores and opposes this move and will take necessary countermeasures to defend its legitimate rights and interests," the Foreign Ministry said.  "China’s position is firm and consistent. Trade and tariff wars have no winners."  The spokesperson argued that the US' unilateral tariff hikes "severely violate" World Trade Organization rules & "cannot solve the U.S.'s problems at home and more importantly, does not benefit either side, still less the world."  "China is one of the world’s toughest countries on counternarcotics both in terms of policy and its implementation.  Fentanyl is an issue for the U.S.," the Foreign Ministry claimed.  "In the spirit of humanity and goodwill, China has given support to the U.S.’s response to this issue. At the U.S.’s request, China announced back in 2019 the decision to officially schedule fentanyl-related substances as a class. We are the first country in the world to do so," the spokesperson went on, adding that China has "conducted counternarcotics cooperation with the U.S. side in a broad-based way" & that the "U.S. needs to view and solve its own fentanyl issue in an objective and rational way instead of threatening other countries with arbitrary tariff hikes."  Beijing argued that "additional tariffs are not constructive and bound to affect and harm the counternarcotics cooperation between the two sides in the future."  "China calls on the U.S. to correct its wrongdoings, maintain the hard-won positive dynamics in the counternarcotics cooperation, and promote the steady, sound and sustainable development of China-U.S. relationship," the spokesperson added.

China threatens to retaliate against Trump tariffs

Pres Trump said that he is pausing for 1 month his new 25% tariff on goods entering the US from Mexico after Mexican Pres Claudia Sheinbaum agreed to immediately send 10K soldiers to her country's northern border to prevent drug trafficking.  The announcement of the pause came 2 days after Trump slapped 25% tariffs on goods from Mexico & Canada, as well as a 10% tariff on goods imported from China.  Trump said in a social media post that he & Sheinbaum spoke today.  Both he & Sheinbaum said that the 10K Mexican National Guard troop that she is sending to the border with the US will have the mission of halting drug trafficking from Mexico & Canada, particularly that of the deadly opioid fentanyl.  Trump also wrote in his Truth Social post that the Mexican troops will aim to stop the flow “of migrants into our Country.”  “We further agreed to immediately pause the anticipated tariffs for a one month period during which we will have negotiations headed by Secretary of State Marco Rubio, Secretary of Treasury Scott Bessent, & Secretary of Commerce Howard Lutnick, & high-level Representatives of Mexico,” Trump wrote in the post.  “I look forward to participating in those negotiations, with Pres Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries,” Trump wrote.

Trump pauses Mexico tariffs for one month after agreement on border troops

Treasury yields were mixed as investors weighed Pres Trump's new tariffs on goods from key trade partners & their impact on the economy.  The 10-year Treasury yield was down 6 basis points at 4.506% & the 2-year Treasury yield was down 1 basis point at 4.228%.  One basis point is equal to 0.01%, & yields & prices move in opposite directions.  Investors are weighing the impact of tariffs on trade partners, with Trump signing an exec order on Sat imposing 25% tariffs on imports from Mexico & Canada & a 10% duty on China.  The US does roughly $1.6T in business with the 3 countries. Today Mexico Pres Claudia Sheinbaum said that Trump's tariffs against the country would be paused for 1 month as it sends 10K soldiers to its northern border to stop drug trafficking.  Canada, meanwhile, has responded by threatening its own tariffs on the US, while Mexico is looking to impose levies on US goods & the Chinese gov is filing a lawsuit with the World Trade Organization.

10-year Treasury yield slips as investors weigh Trump’s tariffs

All 3 of the major indices are trading lower after Pres Trump announced new tariffs on Canada, Mexico & China.  However early losses have been reduced while traders are weighing quickly changing conditions.