$DIA, $SPY, $QQQ, $RUTX, $VXX
Just In: President Trump says $250-B of Chinese goods now under 25% tariff will be subject to 30% tariff starting on 1 October, expect more…
“I will be responding to China’s Tariffs this afternoon. This is a GREAT opportunity for the United States,” President Trump Tweeted Friday
Wall Street turned risk off Friday rolling into T-Bond and gold after the US-China trade dispute escalated dramatically, with President Trump demanding that American companies seek alternatives to doing business with China after Beijing announced its own slate of retaliatory measures.
The DJIA fell 622.19 pts, or 2.37%, to 25,630.05, the S&P 500 lost 75.7 pts, or 2.59%, to 2,847.25 and the NAS Comp dropped 239.62 pts, or 3%, to 7,751.77.
The losses brought the DJIA’s decline for August to more than 4%.
Other than possibly raising the tariffs set to kick in on 1 September it is not clear what action President Trump might take.
Inside the White House, the Hawks have been pushing for a direct intervention in currency markets by the Treasury by pointing to a slowdown in US manufacturing.
Just how effective a Fed cut or an intervention would be is unclear.
The relevant Treasury fund has $92-B in it. Even if the Fed were to join in, as it has in past interventions, and match that amount, a $180 billion injection into a $5-T per day global Fx market will have a limited effect. It might also unnerve markets and have longer-term economic consequences.
Beyond that, The Trump Administration could raise further barriers to Chinese investment in the US or target China’s energy supply by revoking waivers that allow Beijing to continue purchasing Crude Oil from Iran and Venezuela.
President Trump could also take steps to further isolate Huawei Technologies Co., which the US deems a security threat, in its bid to supply 5G technology in the US.
Or, he could take a harder line against Beijing over human rights and the autonomy of Hong Kong, where protests have raged for going on 12 weeks.
US and Chinese negotiators have spoken by phone and are planning another call in coming days. People familiar with their intentions previously said that the Chinese delegation is sticking to their plan to travel to the US in September for face-to-face meetings, which may offer a chance for further a truce.
President Trump also ordered mail carriers to search for deliveries of the drug fentanyl coming from China.
“Also, I am ordering all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE” deliveries of the illegal drug. It is not clear what the carriers’ responsibilities are in halting those shipments, which have helped fuel an opioid epidemic in the US.
Stopping shipments of illegal fentanyl that enter the US is a job that falls to government agencies such as the Drug Enforcement Administration, Food and Drug Administration and Customs and Border Protection.
Illegal Chinese fentanyl is increasingly entering the US through the Mexico border via drug traffickers instead of being sent directly.
Friday, the major US stock market indexes finished at: DJIA -623.34 at 25628.88, NAS Comp -239.62 at 7751.79, S&P 500 -75.84 at 2847.11
Volume on the NYSE came in at 971-M/shares exchanged
- NAS Comp +16.8% YTD
- S&P 500 +13.6% YTD
- DJIA +9.9% YTD
- Russell 2000 +8.2% YTD
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bearish for the week ended 23 August 2019.
Have a terrific weekend