The Week of May 6 in Markets - Trade Wars: What Are They Good For?
 |
| Correlations |
Trade wars had been absorbed and resolved by the psychology of the market, but this week there was some percolation. Last week ended with signs that job growth was strong, and that the U.S. economy was not particularly slowing down. As equities were in retreat across the globe, America was looking chipper.
Over the weekend, as rain fell on his Florida White House, Pres. Trump tweeted, boasting of the success of his 10% tariffs in adding to government coffers, and challenging China with suggestions 25% tariffs were on the way – this as the Chinese delegation was about to leave home for what some portion of the market hoped would be the trade denouement finale.
On Monday, most would say under the thrall of the Tweeter in Chief, the Dow Jones Industrial Average DJIA was down nearly 500 points at the get-go; it rose from this nadir to finish the day down 0.3 percent. Buyers saw opportunity.
On Tuesday, the Dow tumbled 1.8% to 25,965.09, its largest percentage decline since Jan. 3, while the S&P 500 dropped 1.7%, to 2,884.05. On Wednesday, a modest rally faded as the Chinese delegation arrived.
Also of note, a broken IPO by Uber.
Over the week, The Dow declined 2.1 percent to 25,942.37 while the S&P 500 index fell 2.2%, to 2881.40.
Trump has walked the world back into an era that had passed, by using tariffs as a political weapon. The New York Times' well documented disclosure of his huge 1980s tax losses showed that he briefly (til the market got wise) followed a pump and dump pattern of personal stock trading that he could well be reenacting now as he pushes his Tweet button. A conference of psychologists has concluded the president is delusionally heedless of the consequences of his impulsive actions. He is threatening a worse deal for China should he be reelected. - Jack Vaughan
Fri May 10 || S&P 500 || 2881.4
Fri May 10 || DOW || 25942.37
Fri May 10 || NAS || 7916.94
Fri May 10 || FTSE100 || 7,203.29
Fri May 10 || LSCrude || 61.71
Fri May 10 || Gold || 1,286.50
Fri May 10 || Euro || 0.8899
Fri May 10 ||TBill3-mo || 2.42%
Fri May 10 ||TBill10-y || 2.47%
Let's take a look at that from another perspective - that is next Monday's, when China retaliates with more tariffs.
Fri May 10 || S&P 500 || 2881.4 || Mon May13 || 2811.87 || -2.41% Fri May 10 || DOW || 25942.37 || Mon May13 || 25,324.99|| -2.385 Fri May 10 || NASDAQ || 7916.94 || Mon May13 || 7647.02 || -3.41% Fri May 10 || FTSE100 || 7,203.29 || Mon May13 || 7163.68 || -0.55% Fri May 10 || LSCrude || 61.71 || Mon May13 || 60.84 || -0.82% Fri May 10 || Gold || 1,286.50 || Mon May13 || 1297.40 || 0.008 Fri May 10 || Euro || ---- || Mon May13 || 1.221 || x Fri May 10 ||TBill3-mo|| 2.42% || Mon May13 || 2.41% Fri May 10 ||TBill10-y|| 2.47% || Mon May13 || 2.41%
So what happened it may be said is that the market was optimistic that there was going to be a deal, and that was baked into the rise in the stock market from December to now. It had to come out of the market.
Over the weekend, as rain fell on his Florida White House, Pres. Trump tweeted, boasting of the success of his 10% tariffs in adding to government coffers, and challenging China with suggestions 25% tariffs were on the way – this as the Chinese delegation was about to leave home for what some portion of the market hoped would be the trade denouement finale.
On Monday, most would say under the thrall of the Tweeter in Chief, the Dow Jones Industrial Average DJIA was down nearly 500 points at the get-go; it rose from this nadir to finish the day down 0.3 percent. Buyers saw opportunity.
On Tuesday, the Dow tumbled 1.8% to 25,965.09, its largest percentage decline since Jan. 3, while the S&P 500 dropped 1.7%, to 2,884.05. On Wednesday, a modest rally faded as the Chinese delegation arrived.
Also of note, a broken IPO by Uber.
Over the week, The Dow declined 2.1 percent to 25,942.37 while the S&P 500 index fell 2.2%, to 2881.40.
Trump has walked the world back into an era that had passed, by using tariffs as a political weapon. The New York Times' well documented disclosure of his huge 1980s tax losses showed that he briefly (til the market got wise) followed a pump and dump pattern of personal stock trading that he could well be reenacting now as he pushes his Tweet button. A conference of psychologists has concluded the president is delusionally heedless of the consequences of his impulsive actions. He is threatening a worse deal for China should he be reelected. - Jack Vaughan
Fri May 10 || S&P 500 || 2881.4
Fri May 10 || DOW || 25942.37
Fri May 10 || NAS || 7916.94
Fri May 10 || FTSE100 || 7,203.29
Fri May 10 || LSCrude || 61.71
Fri May 10 || Gold || 1,286.50
Fri May 10 || Euro || 0.8899
Fri May 10 ||TBill3-mo || 2.42%
Fri May 10 ||TBill10-y || 2.47%
Let's take a look at that from another perspective - that is next Monday's, when China retaliates with more tariffs.
Fri May 10 || S&P 500 || 2881.4 || Mon May13 || 2811.87 || -2.41% Fri May 10 || DOW || 25942.37 || Mon May13 || 25,324.99|| -2.385 Fri May 10 || NASDAQ || 7916.94 || Mon May13 || 7647.02 || -3.41% Fri May 10 || FTSE100 || 7,203.29 || Mon May13 || 7163.68 || -0.55% Fri May 10 || LSCrude || 61.71 || Mon May13 || 60.84 || -0.82% Fri May 10 || Gold || 1,286.50 || Mon May13 || 1297.40 || 0.008 Fri May 10 || Euro || ---- || Mon May13 || 1.221 || x Fri May 10 ||TBill3-mo|| 2.42% || Mon May13 || 2.41% Fri May 10 ||TBill10-y|| 2.47% || Mon May13 || 2.41%
So what happened it may be said is that the market was optimistic that there was going to be a deal, and that was baked into the rise in the stock market from December to now. It had to come out of the market.
Comments