April 7, 2018 | Uncategorized |
This week I expect the rotation from worry to relief over the Trump administration’s tariff policy and a potential trade war with China to stay in control of the narrative. Next week we’re likely to shift to earnings stories as companies begin to report really good first quarter earnings. After a couple of weeks of that we’ll either slide back to the trade narrative or start to get ready for the Federal Reserve narrative surrounding a June invest rate hike.
April 6, 2018 | Daily JAM, Friday Trick or Trend, Short Term |
For a while today it looked like the markets might have decided to adopt a belief that something would pull President Donald Trump back from the brink of a China/U.S. trade war. Either it was just bluster, a negotiating ploy, or something that would be tempered by other voices in the White House. That was the view powering the rally for the last three sessions, after all. But on further consideration the markets decided to take the President’s call for tariffs on an additional $100 billion in Chinese goods very seriously indeed.
April 5, 2018 | Daily JAM, Morning Briefing |
Just as financial markets were starting to believe that all the bluster about imposing new provocative tariffs on Chinese imports might indeed be just a negotiating ploy as administration officials loudly proclaimed over the last to days, last night President Donald Trump demanded that his chief trade negotiator find an additional $100 billion in Chinese imports to consider for new tariffs.Â
April 5, 2018 | Daily JAM, Morning Briefing |
With all available officials on deck today in Beijing and Washington to talk down fears of a trade war and to talk up prospects for trade talks, the U.S. financial markets have returned to “normal.” And what is “normal” right now? A 0.47% gain in the Standard & Poor’s 500 stock index as tech shares recover with Facebook (FB) up 1.81% and Amazon (AMZN) up 2.62%. Normal is also a down day for Treasuries
April 4, 2018 | Daily JAM, Morning Briefing, Short Term |
The Standard & Poor’s 500 stock index finished up 1.16% today, closing at 2644.69, as traders and investors decided that the tariff measures targeting China that the Trump administration announced last night and the retaliatory measures announce by China today would never be put into effect. Instead the two countries would talk away their trade differences, or the Trump administration would back down, or something. You’ll note that I’m skeptical.
April 2, 2018 | Daily JAM, Mid Term, Morning Briefing |
It’s always hard to attribute a market move to one particular news event, but today the odds are good that this morning’s plunge in stock prices is in reaction to China’s decision to impose tariffs on 128 U.S. products in response to the Trump administration’s new tariffs on imported steel and aluminum. The big target in China’s move is U.S. pork exports–the United States exported $1.1 billion in pork to China in 2017.
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.
