March 28, 2018 | Daily JAM |
If you’re having a hard time figuring out what parts of the Trump administration’s tariff plans are serious (and thus might provoke a global trade war) and what parts are bluster (designed as outliers in an ongoing negotiation), you’re not alone. The financial markets are bouncing between panic–at the potential end of global growth–and relief–because the final positions won’t be all that bad. And unfortunately, the whiplash is not about to get any better.
March 23, 2018 | Daily JAM, Morning Briefing, Short Term, Volatility |
U.S. stocks started the day in the green with the Standard & Poor’s 500 stock index up 0.44% was of 9:33 a.m. New York time. The index was still in the green as of 11 a.m. (up 0.38%) but then came the retreat. As of 11:30 a.m. the S&P 500 was off 0.37%. The Dow Jones Industrial Average was lower by 0.25% and the NASDAQ Composite had declined 0.64%. The drop in the indexes came even as oil and energy stocks rallied
March 22, 2018 | Daily JAM, Uncategorized, You Might Have Missed |
This isn’t going to sound very technical or sophisticated but to me the day feels like one where lots of traders and investors decided that they just couldn’t see any near term upside and in the absence of that upside they decided to sell. This pessimism strikes me as a delayed reaction to yesterday’s Fed meeting and a new dot plot that showed increased sentiment at the Federal Reserve for at least two more and possibly three more interest rate increases in 2018–and more rate increases to come in 2019 and 2020. In this context the President’s China tariff proposal isn’t the killer but rather just one more negative element.
March 22, 2018 | Daily JAM, Morning Briefing, Short Term |
The only thing that is (relatively) certain is that President Trump will announce $50 billion in tariff and other trade restrictions aimed at China. That announcement is scheduled for 12:30 p.m. today in Washington. There’s plenty of speculation today about the nature and extent of China’s response.
March 17, 2018 | Uncategorized |
Lots and lots of big macro potentially market moving news this week. Events range from the first 2018 meeting of Group of 20 finance ministers to an almost certain interest rate increase from the Federal Reserve to the effective date for U.S. tariffs on steel and aluminum
March 14, 2018 | Daily JAM, Mid Term, Volatility, You Might Have Missed |
Today the White House announced  that President Donald Trump has picked Larry Kudlow to replace Gary Cohn as director of the White House National Economic Council. Kudlow worked as an economic advisor to President Reagan where he was a dedicated believer in supply-side economic policies, and he is known as an advocate of expanding global trade. I believe Kudlow’s appointment to the job of the administration’s top economic adviser just about assures that the President will announce a big package of tariffs (and maybe other measures) aimed at China within the next week or two. Such a package would certainly increase the chances of a trade war between the United States and China.
March 12, 2018 | Daily JAM, Uncategorized, You Might Have Missed |
Today, Monday March 12, the Industrial Select Sector SPDR ETF (XLI) fell 1.24%, declining more than either the Standard & Poor’s 500 (down 0.13%) or the Dow Jones Industrial Average (down 0.62%.) I think this is an indication that fears that the Trump administration will still manage to set off a round of trade retaliation to its higher tariffs on steel and aluminum are still with us. Â
March 10, 2018 | Daily JAM, Friday Trick or Trend |
So which countries will get an exemption from the Trump administration’s 25% tariff on imported steel and 10% on imported aluminum? If the administration passes out enough exemptions, then what remains will be a tariff targeted at China–and maybe at South Korea.
March 9, 2018 | Daily JAM, Mid Term, Volatility, You Might Have Missed |
It’s only March but I’m rethinking my take on 2018.When the calendar pages turned over into 2018, my take on the year was that for stocks the first half would be much like 2017: Despite rising interest rates from the Federal Reserve, there was enough earnings growth to move stocks up even from near record highs. The bond market would be more problematic with those interest rate increases keeping downward pressure on bond prices and upward pressure on bond yields. With inflation still relatively quiescent, though, the downward trend in bond prices would be relatively gradual. It was the second half of the year that investors had to worry about, I thought then.
March 8, 2018 | Daily JAM |
At a ceremony in the White House President Donald Trump signed an executive order authorizing a 25% tariff on imported steel and 10% on imported aluminum. The tariffs will go into effect in 15 days. Mexico and Canada are exempt from the tariffs for an indefinite time.
March 8, 2018 | Daily JAM, Morning Briefing, Short Term |
The major U.S. stock indexes were just about unchanged at noon New York time today–Standard & Poor’s 500 down 0.02% and the Dow Industrials up 0.25%–ahead of 24 hours or so of high headline risk. Today’s big event–maybe–is the tariff decision that President Donald Trump promised reporters this morning would be forthcoming around 3:30 p.m. this afternoon. Tomorrow’s big news is the release of the February jobs report
March 7, 2018 | Daily JAM, Mid Term |
The door had barely closed on White House economic adviser Gary Cohn before the winning side in the White House trench warfare on trade began floating proposals to crack down on China. Peter Navarro, who has emerged, along with Commerce Secretary Wilbur Ross, as the point man for the Trump administration’s trade policy, has long been an advocate of an aggressive policy to limit Chinese exports to the United States and Chinese investments in the U.S. companies.
