U.S. stocks suffer big across-the-board losses as trade war escalates

  
Via:  john-russell  •  2 weeks ago  •  10 comments

U.S. stocks suffer big across-the-board losses as trade war escalates
“Investors have reassessed the trade issue," said Howard Silverblatt of S&P Dow Jones Indices. "They weren’t factoring enough risk into it.”

S E E D E D   C O N T E N T


U.S. markets plunged Monday as China said it would raise steep tariffs on $60 billion in U.S. goods, upping the stakes of a trade war that threatens to imperil the global economy.

The Dow Jones industrial average closed down 617 points, or nearly 2.4 percent, as investors feared that the standoff with China would escalate into a full-blown economic crisis — tipping the United States and world economies into recession. Dragging the Dow were Apple, Caterpillar and Boeing, with drops of 5.8 percent, 4.6 percent and 4.9 percent, respectively. The blue-chip index slumped to its lowest close since January.

“Investors have reassessed the trade issue," said Howard Silverblatt of S&P Dow Jones Indices. "They weren’t factoring enough risk into it.”

...

“Today’s tit-for-tat in U.S./China trade tariffs has exacerbated tumbling futures out of fear that tensions could trigger a global recession,” said Sam Stovall, chief investment strategist at CFRA Research.

The drama began last week after President Trump imposed a 25 percent tariff on $200 billion in Chinese imports to the United States. He also told aides to begin plans to hit more than $300 billion in other Chinese goods.

“Stock investors are in risk-off mode as Trump’s trade war with China seems to be escalating while negotiations seem to be breaking down,” said Ed Yardeni, president of Yardeni Research. “Adding to the geopolitical tumult is mounting tension in the Middle East following the sabotaging of Saudi oil tankers over the weekend.”

John Kilduff of Again Capital said that, at least for now, the concerns about Iran are taking a back seat to the fear that the trade salvos between the United States and China could ultimately lead to a reduction in world oil demand.

https://www.washingtonpost.com/business/2019/05/13/dow-plunges-points-market-open-investors-fear-escalating-trade-war-threatens-economy/?utm_term=.386155ff8d9f

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JohnRussell
1  seeder  JohnRussell    2 weeks ago

I heard a theory today   -  Trump wants to manipulate the stock market ups and downs by moving toward or away from a trade deal with China, depending on when he wants the stock market to rally.  Supposedly he intends to do this through 2020.

Interesting speculation. I wouldnt put it past him.

 
 
 
Texan1211
1.1  Texan1211  replied to  JohnRussell @1    2 weeks ago
I heard a theory today

In which left-wing nuthouse did you hear that nonsense?

 
 
 
Dean Moriarty
1.2  Dean Moriarty  replied to  JohnRussell @1    2 weeks ago

I love a good conspiracy theory. Maybe we can get this one to go viral. 

 
 
 
JohnRussell
1.2.1  seeder  JohnRussell  replied to  Dean Moriarty @1.2    2 weeks ago

When things look darkest he will "strike" a trade deal , or so he will say, and stocks will go up.

 
 
 
Perrie Halpern R.A.
1.2.2  Perrie Halpern R.A.  replied to  JohnRussell @1.2.1    2 weeks ago

John,

I know you say that I don't often agree with you, but this actually sounds very doable. And from a man who prided himself on the "art of the deal"... this was one of the tactics in the book. Created an impossible situation, and then dial it back to one that you like, at a time that you like. 

Apparently no one here has read the book. I have. 

 
 
 
JohnRussell
1.2.3  seeder  JohnRussell  replied to  Perrie Halpern R.A. @1.2.2    2 weeks ago

Trump would like nothing more than a stock market rally on his "command". He has that possibility.  If he announces in the next few days that there will be a forthcoming deal with China the market will go up. It's not going to happen in the next few days, but could happen the next time Trump thinks he's in trouble. Then he can go through the whole process again later down the line. I read this speculation in some article today. You are right Perrie, it does sound like something he would do. 

 
 
 
Freedom Warrior
1.3  Freedom Warrior  replied to  JohnRussell @1    2 weeks ago

What's so interesting about it?   I suppose we should just ignore China's part in all this.

 
 
 
Perrie Halpern R.A.
1.3.1  Perrie Halpern R.A.  replied to  Freedom Warrior @1.3    2 weeks ago

Of course not, but do you realize that by creating tariffs as high as 25% is the same as taxing everyone on consumer goods at that same rate?

This is when you negotiate. Incremental increases for no change, until they budge. 

 
 
 
FLYNAVY1
1.3.2  FLYNAVY1  replied to  Freedom Warrior @1.3    one week ago

I suppose we should just ignore China's part in all this.

Why not.... we've created this imbalance all on our own, as well as the migration of jobs over the last 40 years.  All in the quest of less expensive products, and higher profits.  This is the free market in it's essence.  (AKA unrestricted capitalism) 

 
 
 
Freedom Warrior
1.3.3  Freedom Warrior  replied to  FLYNAVY1 @1.3.2    one week ago
This is the free market in it's essence.

That's blatantly false. It's nothing close to a free market.  However, the US is attempting to move the dial in that direction by asserting our rights in the areas of U.S. intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation. 

It's a task no other POTUS has been willing to tackle, likely out of self serving interests and cowardice.

 
 
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