Dow plunges 700 points(!!!) on Trump's Tariff policies
NEW YORK (Reuters) - U.S. stocks dropped on Thursday, with each of the major Wall Street indexes suffering its biggest one-day percentage drop in six weeks, on the heels of an action by President Donald Trump to impose tariffs on up to $60 billion of Chinese imports.
The Dow plummeted 700 points....
But but, the market is booming because of Trump....(said a number of our stalwart RW)....Where are they now?
Checking their investment portfolios to see how much money they may have lost, or could lose if the drop gets worse.
But, you can bet that they will be blaming Hillary, Obama or Bill Clinton.
And so will Trump.
Why not? Trump hasn't received any credit for any of the increase since he has been President. They say it was Obama's economy. The Dow reached 18,552.57 on August 19,2016, the highest it ever got under Obama. It floundered along with the prospect of Hillary becoming the next President until the day Trump won, when it was 18,589.69. May 18, 2015 it was 18,298.88. For the last 22 or 23 months before Trump was elected it went up 290.81. points under Obama. but today it is 23,957.89, even with the 724 point drop. That's 5368.20 points in 15 months. Compare that to 290.81 points gained during Obama's last 23 months to Trump's 5368.20 points gained during his first 15 months, since he was elected President. Then tell me Trump's economy is Obama's.
I'm not in favor of the tariffs. You can't compare Obama's first 15 months when the recession was declared ended in 2 or3 months into his Presidency. It's a whole lot more difficult to take an economy that is floundering along and move it up this many points than it is to take an economy that has tanked after the recession has ended and move it up it up this much. They always increase rather quickly after a recession.
Still, I wish I had bought some of those bargains when Obama took office, because many of them have increased tremendously. Of course some of them don't exist today either, so what you gonna do? Just remember if they don't come back as a whole, we're cooked anyway, so buy the most viable ones and hold on to them.
I call bullshit. Trump got a bump after signing the tax cut. Republicans have been pushing the narrative that will grow the economy by 3%. A trade war with China will crush that starting with US food imports.
Sorry there eviilgeniius, but you don't even have an argument with that BS call. The Dow was 24,966.41 the day the tax bill was signed on December 20, 2017, a mere 3 months ago when Pelosi and CNN were spreading propaganda of how bad it was. In other words the Dow had increased from 18,589.69 to 24,966.41 since he was elected, a difference of 6376.72. The Dow had only gained 290.81 points over the last 2 years before he was elected.
Although I am not in favor of tariffs, unlike any of our last few Presidents, this President is doing something. You may call it anything you want to, but doing nothing wasn't working for us and whether it's a bluff or not, China isn't going to come out of this without sustaining financial harm as well. They don't want this trade war any more than we do, but to just continue along the same path the last few Presidents have left us on is certainly to hurt us much more in the long run. I know it's hard for some to grasp the idea of putting your foot down instead of leading from the rear and allowing things to only get worse.
We will suffer, but so will China. I think it will be like North Korea with the Democrats screaming at the sky ignoring it was their President who put the world in jeopardy with North Korea in the first place and the last two Presidents who didn't do a damn thing about it. I see a President who I don't agree with on many things taking on the hard jobs instead of just allowing things to get to the point there is nothing that can be done, while they prance around the country and the world admiring themselves for being ineffectual world leaders.
Neither are any true Conservatives.
Conservatives are for free trade, and a believer allowing natural "market forces" to prevail...tariffs are in direct opposition to conservative priniciples!)
(Many of Trump supporters --heck, even many liberals-- are not aware of the fact that Trump is not actually a conservative).
The Dow volatility didn't change Trump's numbers. Trump got a bump in numbers for the tax breaks. The market plunge this week is both the trade news AND the interest rate news. Both of those together creates market uncertainty.
Why should he? The market has been on a steady rise since January 2009, after the failed presidency of George W. Bush. Everything we are seeing up to now has been because of Obama, not Trump.
What we are seeing now is a direct result of Trumpian policies, the two tariffs that Trump has instituted have caused the Dow to drop nearly 1000 points in a month. The other problem we have right now is a 1.6 trillion dollar budget that has no funding, thanks to the tax cuts for the rich that Trump wanted, enjoy.
Depending on what Trump actually decides to do...this could have serious repercussions for the entire economy.
I suppose the one sign that might give us hope is that Trump so often lies that he may not actually carry though with what he promised.
I like to think of it as unconventional tactics. I mean, some of the lying. It's kind of like bluffing and it has to be convincing. I hate to have to say this, but the Left falls for the bluffs as you can see on MSNBC, CNN and even the MSM every day. He keeps them running around like a cat and a laser light.
You may not like Trump, but think of all the corruption that has been exposed since he was elected. We had no idea this government had been so corrupt..
I like to think of it as unconventional tactics. I mean, some of the lying
Ah c'mon-- let's not be so critical of Trump!
He's not actually lying-- he's just presenting "alternative facts" instead of "true facts"!!!
Of course he lies. Tell me any of them who doesn't, but lying is one thing and bluffing with conviction and being convincing is another thing. If it's convincing enough you don't even realize it's a bluff.
Yep, all those people in the White House right now and, over the past year that have had to plead guilty to taking money from foreign governments, how long do you think it will be before Trump and, family have to plead guilty to the same?
Your idea of a bluff is the rest of the country's knowledge of a lie told. Admit it, Trump lies more than a cheap Persian rug.
Fortunately it looks as though Trump is toothless, at least that is how Wall St. seems to be acting. He has already backed off on the steel and aluminium tariffs (exempting the countries that actually matter). His China tariffs haven't taken effect yet and it looks like most investors are counting on the Chinese and those in the US government not named Trump acting like adults and coming to an agreement that doesn't harm either country for no reason. Basically, everyone is just ignoring Trump, as usual.
Been thinking about this. It is quite possible that the markets are feeling other things besides the tariffs. America is sliding into a different something and a solid 40% of the electorate remains unmoved.
Its not the tariffs themselves-- its the fact that if we impose tariffs on Chinese imports, many become too expensive for Americans to buy-- thus hurting Chinese business.
So-- its only natural that the Chinese would retaliate by imposing tariffs on things the Chinese buy from us. They therefore become more expensive, so the Chinese will buy less from us-- thus hurting American business-- and eventually hurting our entire economy.
(After all, if we can make Chinese goods more expensive to buy by putting tariffs on them-- why can't the Chinese do the same to American goods we want to sell to them?) That's known as a "trade war".
For example: These Are the U.S. Produced Farm Commodities China May Target in Trade Dispute
Well, your explanation is most certainly valid. But, far to many Americans are economically on the edge. And I personally believe the 'tariffs' will hurt many Americans but a few Americans will prosper greatly. And I believe this is a known factor in the Trump Admin.
I also suspect that the political discourse is about to become coarse, even more divided and systems will fail and break down. Trump has placed himself on the ropes and I firmly believe he will stop at nothing to preserve himself. What will happen if 'his base' becomes violent? What if America shifts to a war footing? Will the markets react?
If Trump starts a war with Iran we will have a lot more to worry about than the Stock markets!
In a trade war with China (not a shooting war but a trade war) both countries will be hurt economically. A few American traders may benefit, but most won't-- but even amongst Trump supporters, many more of them will suffer than will benefit.
And while many Republicans are afraid to oppose any of Trump's policies (because they are afraid of what might happen to them in primaries where the alt-Right prevails)...there will be a significant number who may finally oppose Trump on this-- because their constituents would suffer economically, yes, even those who are well off financially. Trade Wars are stupid and self-destructive).
You mean we go to war on foot? Better buy your sneakers right away!!! They're made in China. What isn't?
Better go on down and get you a pair before the price goes up.
Apparently neither the readed trade deficit with China nor the fact that sneakers are made in China (which of course denies jobs to American workers thereby causing great unemployment here) has hurt Nike earnings all that much. From today's market news:
Nike shares pop on earnings
Nike's sales in North America dropped 6 percent during the third quarter, while those in Greater China jumped 24 percent.
Let's put tariffs on China! (Then they can retaliate and put bigger tariffs on U.S. imports, which of course will increase Nike sales to China and help the U.S. economy-- or will it?)
I don't think the tariffs are going to be good for anyone Krishna, but you watch. China and the USA will sit down at the table over this, when before, without this action, there has been no reason to do so. I don't expect the tariffs to last that long. Both countries economies will suffer.
Krishna, you forgot one thing. China doesn't want their economy to suffer either. Remember, they have a lot of people to maintain control over. As long as things are good, these people remain docile. I bet their economy is at least as dependent on us as we are dependent on them. Remember the cold war?
I think this will happen now that John Bolton is in the White House.
Oh please! You all have been saying Trump is going to start a war since at least 10 November 2016 if not before.
I'm talking about John Bolton advising Trump. Bolton's past isn't exactly one of peaceful language.
https://www.washingtonpost.com/world/south-korea-worries-about-the-return-of-john-bolton-and-his-hawkish-views/2018/03/23/4adc68aa-2e6c-11e8-911f-ca7f68bff0fc_story.html?utm_term=.01ba3cb47157
Is China at fault for this? How about Mexico? The most comfortable shoes I ever wore in my life were Rockport Walkers, the ones made in Massachusetts, and then Rockport moved its manufacturing to Mexico - I bought a pair of the Mexican made ones in the exact same size and they bite into my ankles (just don't fit right). So I still wear my 15-year-old ones that are looking ragged but I wear them all the time and 15 years is an awful long time for shoes worn almost every day.
However, I can say almost the opposite for cars. My first five cars (I traded every 4 or so years) were American made, but I got my first taste of how incredible cars could be when I bought my first foreign one. I believed "forced obsolescence" was normal when it came to American cars, both in looks and lasting condition, but not at all when it came to foreign cars.
Maybe everything I've said above is off topic, but one point I want to make is that a trade war with China is going to make poor people suffer - Walmart will have to raise its prices.
With conflicts throughout the world, terrorism and anti-Semitism growing instead of receding, maybe a different tack could change things.
It was and, is Bolton who supported the Iraq war, you know the one with phony WMD's.
For multiple reasons, we now operate in a global economy. Most companies are dependent on others throughout the globe for their raw materials, component products etc. As we are all intertwined to one degree or another, if you attack one it is similar to attacking ones self, just doesn't make sense.
The only ones that will pay the price for this foolish tactic will be the end consumer, that would be you and I.
All correct.
In a trade war, which Trump seems intent on proviking, all nations suffer. American exporters will be hit by retaliatory tariffs from China, resulting in decreased U.S. sales to China.
This will increase the U.S. trade deficit,hurt U.S. companies, hurt the stock market, and result in layoffs of U.S. workers.
Smart?
Nope.
In a trade war, which Trump seems intent on provoking,
And he's stated his position not only on tariffs-- but also on the inevitable trade war which would result:
Trump doubles down: 'Trade wars are good, and easy to win'
Do you think all wars should be held with a white flag held up high? I agree, this will hurt the USA, other countries and China during the duration of it. If you have to be one or the other, it's better to be farsighted than nearsighted.
Well, there ya go, talking about your nearsighted president again, Trump can't see beyond his next tweet.
It'll also cause the poorer Americans who shop at outlets like Walmart to suffer due to higher prices.
Not at all, but, Trump and his cronies in Congress don't give a fig about how much the American people might suffer. After all, he did give them a pittance of a tax cut. Right? That ought to shut them up.
As long as they and theirs live high on the hog and only the best will so, they care less what their selfish political bonks will do to the people at home. As long as Trump can live in the luxurious life style he has become accustomed to, he could care less what happens to the people down stream. And it shows.
The trade imbalance is destroying our steel and aluminum industry. Dependence on foreign sources for those metals is a national security issue. The problem is not just with China but also with other countries including the EU and Canada. Trump threatened to impose tariffs on them as well and they have all threatened to retaliate. For now, Trump is just targeting China.
As already pointed out, China is extorting intellectual property (IP) from businesses in return for access to China and that IP theft is costing us between $200-$600 billion a year. Yes, companies “agree” to extortion but extortion works precisely because you have no viable alternative. China’s labor costs are so low that companies must either manufacture in China (or somewhere else as cheap) or go out of business because their costs are too high to compete. As a result, we not only lose revenue from intellectual property but our entire manufacturing base shifts to China, leaving regions in the US with high unemployment.
Risking a trade war with China is definitely high risk (especially with China being our second largest lender) but continuing to bend over doesn’t work for me either. So if Trump is wrong, what’s right?
This is true but, it isn't just China that the president has placed tariffs on it is the world, remember the steel and, aluminum tariffs from less than a month ago, those two tariffs are on most of the world, Trump said that it wouldn't be on Canada but, he hasn't ruled out anyone else. Plus, placing a tariff on steel and, aluminum will hurt our economy since there are company's that rely on the cheaper steel and, aluminum to build things that we use everyday, not just the cans used in canning foods and, the reason for this is that there aren't enough steel and, aluminum producers in the U.S. any longer to produce what is consumed it has to come from outside the U.S.
One reason we don’t have steel and aluminum producers is that they’ve been driven out of business by lower cost foreign competition. A tariff will increase the price of foreign metals and, arguably, revive our industry. Although that will negatively affect other American companies who depend on low cost metal, our national defense depends on access to steel and aluminum to build tanks, planes, missiles, and ships. If we are dependent on China for these metals, and get in a military conflict with China, China can simply cut off our access and we will be at a tremendous disadvantage. One reason Germany lost World War II is that they couldn’t hold a candle to American production.
Thus driving up the price of goods made with metal in this country. The jobs created by this move will not make a difference, (only 150K jobs estimated), in fact the LOSS of jobs created by this move will put us back into a recession.
Most of our foreign steel comes from places like Canada and, Europe, not China, in spite of the fact that Trump built most of his towers with Chinese steel.
No European country can, simply because we have the land mass and, the ability to build steel plants faster than they can and, to put them into production faster because we have more iron mines in this country than they do, well, except for Russia.
It’s still a national security issue if we are dependent on foreign sources for steel.
In the long term, the market works its way higher. It always reaches new highs. Ten years ago, we reached a virtual nadir in the market, and yet, it came back to reach new heights.
Market punditry is always in abundance, but unlike other topics that are discussed, there is far more objectivity where long term market performance is concerned.
It's disappointing to see the market becoming a source of short term titillation for the group here. All it does is add to confusion, consternation, and of course, the dissemination of long-winded opinions by academics and dilettantes.
Yes-- the long term.
But in the intermediate term, many investors-- both large and small, will face significant financial loses...trade wars are bad for markets.
(Granted, the "big boys" usually come out much better than the "little guy").
Surely a sophisticated professional trader like yourself sees opportunity anytime the market moves either up or down with options trading.
Well, of course the sort of volatility we've been seeing lately makes for some great opportunities for smart traders-- even without trading options (just by buying and selling stocks short-term).
Excessive volatility makes many people nervous, but as you implied, if done wisely it can lead to really big gains using smart options strategies. (One thing I like is the fact that volatility leads to much higher options premiums-- again, this can quite an opportunity if done wisely-- and of course having a keen awareness of the risks involved!!!).
I used to trade a lot more often, and trade options more. I noticed that generally, the more time I put into it (researching-- not necessarily trading) the better I did. But for over a year now I gotten a bit bored with the market (putting in all that time-- I've developed other interests. It should come as no surprise that my being an ENTP, money isn't my only --or even main --consideration) .
So now I do and occasional short term trades.....and even occasionally actually "invest" conservativey for the long term.....
(Currently I may do only 1 trade a week-- if that).
But as you implied, volatility is great for options trading. Since I'm trying to spend much less time on trading, I switched a bit from riskier stocks to more conservative strategies, and buying mainly dividend paying stocks.
And none of the more complex strategies such as spreads and straddles. In fact, I only trade options that will allow me to decrease risk significantly yet at the same time earn me money.
As I'm sure you probably guessed by that statement, that means . . . selling covered calls! (And when a stock suddenly pops-- as is often the case in this volatile market-- options premiums can be YUGE!
Just curious-- what sort of trading do you do?
It's disappointing to see the market becoming a source of short term titillation for the group here. All it does is add to confusion, consternation, and of course, the dissemination of long-winded opinions by academics and dilettantes.
Of course when we're not discussing the market here-- the conversation usually turns in the same direction anyway--- confusion, consternation, long winded opinions..as well as derail, people not listening to what others say because they think they "know it all" -- and personal attacks.
My observation is that in online discussions in general-- most people like to talk about things they actually know next to nothing about...such is the nature of social media.
(BTW Sixpick recently seeded something related to that-- and a very interesting conversation ensued)
These tariffs will not only hurt American businesses, but also workers. Tariffs are bad for everyone (except for a select few).
At the start of WWII we had a depleted Navy, most of the ships we had at the time were left overs from WWI, yet we were able to build up our steel production and, build one of the strongest Navy's, Air Forces and, Army's in the world today. Now, you are saying the U.S. can't repeat that?