President Trump’s $500-B Trade Threat Hammering China Investors
$DIA, $SPY, $QQQ, $RUTX, $VXX
Now, with 6 months of wrangling over trade tariffs with the United States has wiped out 22% and counting of China’s stock market value and driven its currency down sharply.
Those moves are just the beginning on what may be coming.
Shanghai’s benchmark share index ,follow here daily, is down roughly 22% (over $11-T) since January, when US President Donald Trump’s 1st trade tariffs on solar panels were announced.
It has fallen 9% since 19 June, when President Trump outlined his plans to tax a lot more Chinese imports than he initially proposed.
Friday, tariffs on the 1st batch of $34-B worth of Chinese imports kicked.
Beijing said it had no choice but to respond in kind by taxing a similar amount of US goods coming into China. Meaningless!
President Trump’s actions will dramatically change the way China does business with the US and the world.
US tariffs on another $16-B of Chinese goods are due to go into effect in 2 weeks, President Trump said Thursday.
But President Trump raised the temperature much further by telling reporters that after the initial $50-B of goods has been targeted with tariffs, he could add another $500-B.
The President’s actions can sink China’s markets deeper into Bear territory.
But the massive scale of President Trump’s suggested new US tariffs, at 10X the initial $50-B would hammer China annual GDP.
The bigger the size of imports facing tariffs the bigger the potential that the GDP impact is larger than a linear extrapolation would suggest. There is no model for this kind of action but economic devastation on the Mainland
The risk is that the Chinese underestimate the impact based on these simple back-of-the-envelope calculations.
Given the uncertainty over the trade dispute, securities analysts in China suggest investors should just sell shares and hold cash.
Friday, the major US stock market indexes finished at: DJIA +99.74 at 24456.48, NAS Comp +101.96 at 7688.41, S&P 500 +23.21 at 2759.56
Volume: Trade on the NYSE came in at 667-M/shares exchanged
- NAS Comp +11.4% YTD
- Russell 2000 +10.3% YTD
- S&P 500 +3.2% YTD
- DJIA -1.1% YTD
HeffX-LTN’s US Major Stock Market Indexes Technical Analysis for the Week Ended 6 July 2018
Have a terrific weekend, America Frist
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