AuthorTopic: Big Slide v2.0 Begins  (Read 110213 times)

Offline RE

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https://www.businessinsider.com/stock-market-news-investors-see-sea-of-red-as-global-stocks-drop-2019-3

Recession fears trigger sea of red in Asian stocks; US and Europe are are only slightly lower
Callum Burroughs


Traders work on the floor of the New York Stock Exchange (NYSE) on December 04, 2018 in New York City. Spencer Platt/Getty Images

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    Fears of a US recession reached new highs during Asian trading hours on the back of bond market warnings.
    US futures are slightly lower in trading after a brutal session on Friday which sent the S&P 500 1.9% lower.
    Nasdaq futures are down 0.3%, while European markets are mixed.

Asian stocks closed in the red with recessionary warnings front and center on Monday.

The selloff on Friday bled into Monday trading, but seemed to stop at Asia as US futures and European stocks are broadly flat. The worries followed a yield curve inversion last Friday, which signalled the bond market's increasing concern about global growth and US recession.

Weaker industrial data out of Germany and dovish moves by the Federal Reserve last week had also dampened sentiment.

Investors saw the inversion of the three month to 10 year year US Treasury yield curve on Friday, the first since 2007, as a flashing light on global recession which prompted a broader run on equities.

"Global stocks have taken a battering in the last couple of sessions as bond yields have sunk across the board," said Neil Wilson, chief market analyst at Markets.com. "The slide in yields last week was a red flag for equities; the bond market loudly proclaiming that it's not confident about the growth outlook."

Here's the roundup as of 10.32 a.m. in London (6.32 a.m. in New York)

    The Shanghai Composite dropped 2% Monday while Japan's Nikkei plunged 3% as the country's economy struggles through global economic headwinds.
    In the US, futures are slightly in the red with the Nasdaq down 0.3% while the Dow and S&P 500 are both 0.1% lower.
    European markets are mixed, but broadly flat. The Euro Stoxx 50, France's CAC and Germany's DAX index are all little changed.
    US 10-year Treasury yields dived on Friday following the yield curve inversion but investors have fled equity markets for bonds Monday, with yields up 0.4%
    Oil, which had previously been boosted by OPEC+ cuts, slightly declined amid growth fears with Brent down 0.1% and WTI 0.4% lower.

SEE ALSO: Yet another recession warning just flashed red — a Treasury 'yield curve' just inverted for the first time since 2007
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https://www.marketwatch.com/story/dow-futures-drop-over-200-points-as-u-s-china-trade-talks-appear-stalled-2019-05-13

Dow tumbles more than 500 points as U.S.-China tariff battle escalates

Published: May 13, 2019 10:50 a.m. ET

China editorial says country won’t ‘bow to any extreme pressure’


AFP/Getty Images China's Vice Premier Liu He, gestures next to U.S. Treasury Secretary Steven Mnuchin in Beijing earlier this year.

By Chris Matthews
Markets Reporter

Barbara Kollmeyer
Markets reporter

U.S. stocks fell sharply Monday morning as China moved to raise tariffs on U.S. goods and take other retaliatory measures after Washington last week increased duties on Chinese imports and both sides appeared to harden their positions.
How did the benchmark indexes fare?

The Dow Jones Industrial Average DJIA, -2.63%  fell 538 points, or 2.1%, to 25,416, while the S&P 500 index SPX, -2.61% dropped 61 points, or 2.1%, to 2,821. The Nasdaq Composite Index COMP, -3.36% slid 224 points, or 2.8%, to 7,694.

Read: Why the stock market is at the mercy of the U.S. consumer
What drove the market?

Trade tensions that drove volatility for stocks last week were rebooting Monday, as investors confronted the prospect that a U.S.-China tariff deal could take longer than anticipated, if a pact occurs at all. Talks in Washington ended Friday without an agreement.

Check out: Here are the stocks to buy if an all-out U.S.-China trade war erupts, says Goldman

After raising tariffs on $200 billion worth of annual Chinese imports to 25% from 10% on Friday, the Trump administration said it was ready to impose higher tariffs on another roughly $300 billion of goods, or nearly all the remaining products Americans buy from the second-largest economy.
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Need to Know: Almost time for investors to take ‘major defensive action,’ fund manager warns

On Monday, Chinese officials announced retaliatory tariffs against the U.S., hitting $60 billion in annual exports to China with new or expanded duties that could reach 25%. Hu Xijin, editor in chief of China’s Global Times, a daily Chinese tabloid with ties to the Communist Party, reported on Twitter Monday morning that China may take further steps in the coming days and weeks.

In several tweets over the weekend, President Donald Trump argued that the U.S. was in an advantageous position over trade, though White House economic adviser Larry Kudlow admitted Sunday that “both sides” will feel the pain. His comment that Trump and China’s President, Xi Jinping, may meet at the Group of 20 international conference in June failed to soothe investors.

See: Here’s how hard the tariff fight could hit the economy

Trump early Monday continued to send tweets regarding the talks, arguing that there was “no reason” for U.S. consumers to pay tariffs and that companies would leave China to avoid the duties if a deal isn’t reached.

Trump Today: President warns China trade spat will worsen as Beijing retaliates

Chinese state-ran media over the weekend published several editorials blasting the U.S. position and vowing that Beijing would stand firm in the talks.

Also read: Chinese media says ‘fierce U.S. offensive’ over trade won’t work

Stocks had ended last week on a positive note, with the Dow rising 114.01 points, or 0.4%, to finish at 25,942.37 on Friday. The S&P gained 0.4% to 2,881.40, while the Nasdaq climbed 0.1% to 7,916.94. For the week, however, the Dow fell 2.1%, its biggest weekly loss since March. The S&P saw a 2.2% weekly fall and the Nasdaq shed 3%, the biggest losses for both since the week ending Dec. 21.
Which stocks are in focus?

Shares of several companies perceived as sensitive to rising U.S.-China trade tensions were under pressure before the start of trade Monday, including Apple Inc. AAPL, -5.74% semiconductor firm Advanced Micro Devices Inc. AMD, -5.94% and Intel Corp. INTC, -2.99%

In addition to China concerns, investors were also paying attention to a U.S. Supreme Court ruling that said Apple customers can proceed with an antitrust lawsuit challenging the company’s exclusive control over the marketplace for iPhone apps.

Uber Inc. stock was still in the spotlight, after the ride-hailing firm made its debut on the New York Stock Exchange Friday. After pricing at $45 per share, Uber stock closed down 7.6% at 41.57. Shares remain under pressure Monday, down 9.7%.

Videogame publisher Take-Two Interactive Software Inc. TTWO, -3.16% and Tencent Holdings Ltd. TCEHY, -4.68% are both set to report earnings after the close on Monday.
What’s on the economic calendar?

At 11 a.m. Eastern Time, the Federal Reserve will release its survey of consumer expectations.

Fed Vice Chairman Richard Clarida gave a speech Monday morning on the central bank’s ongoing review of its overall monetary policy strategy, saying “we expect to make our conclusions public in the first half of 2020.”

Federal Reserve Bank of Boston President Eric Rosengren also gave a speech at the bank’s “Fed listens” conference Monday morning.
What are strategists saying?

“Investors are increasingly worried an anticipated second-half profit rebound may now evaporate as President Trump’s threat to tariff the remaining $325 billion in Chinese imports would disproportionately target consumer products like iPhones, thereby posing a greater threat to the consumption-driven US economy,” wrote Alec Young, managing director of global markets research at FTSE Russell wrote in an email.

“On the heels of 2019’s historic rally, valuations are no longer depressed, making it harder for equities to shrug off looming macro risks,” he added. “With the ultimate trade outcome inherently uncertain and difficult to model or predict, investors are selling first and asking questions later. More globally exposed, cyclical industries like technology and industrials are proving most vulnerable.”

“Any good will to risk assets on Friday has faded through Asia, and there the preservation of capital is the overriding theme, although there is absolutely no panic,” said Chris Weston, head of research at Pepperstone.

“Protectionism and the impact that can have on demand can be hard to model, and it feels that with these dynamics in play the market will further de-risk, with traders wanting a return of their equity, as opposed to on their equity,” Weston added.
How are other assets trading?

Trade worries weighed on Asian markets, where the Shanghai Composite SHCOMP, -1.21%  closed down 1.2% and other major indexes logged losses of 1% or more. Europe followed suit with the Stoxx Europe 600 SXXP, -1.21%  down 1.2%.

The U.S. dollar DXY, -0.04%  slid 0.2% relative to its peers, while gold GCM9, +1.06%  rose 0.8%.

Oil prices CLM9, -1.17% were climbing after Saudi Arabia said two oil tankers were attacked near the Strait of Hormuz early Sunday.

See: Strait of Hormuz: Oil ‘choke point’ in focus as U.S. ends Iran waivers
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📉 Dow plummets after China retaliates with higher tariffs
« Reply #722 on: May 14, 2019, 01:10:17 AM »
Getting close to Ben Lichtenstein time again...

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<a href="http://www.youtube.com/v/jCEYV3-yaN8" target="_blank" class="new_win">http://www.youtube.com/v/jCEYV3-yaN8</a>
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https://www.newyorker.com/news/our-columnists/the-stock-market-intrudes-on-the-alternate-reality-of-trumps-trade-war

The Stock Market Intrudes on the Alternate Reality of Trump’s Trade War

By John Cassidy

8:06 A.M.


After President Trump settles on a pet economic theory, he’s largely oblivious to reason, and can only be shifted by brute force.
Photograph by ​Sarah Silbiger / NYT / Redux

As the news emerged, last week, that trade talks between the United States and China had broken down, and the Trump Administration was moving to raise tariffs on hundreds of billions of dollars’ worth of imports from China, Donald Trump took to Twitter to promote an alternate reality. He argued that higher import duties don’t represent an additional cost to consumers and a drag on over-all economic activity, as the economics textbooks say, but are, in fact, good for the economy.

“I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers...great for U.S., not good for China!” Trump tweeted last Wednesday. On Friday, he reiterated the message, saying, “Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch!” And this Monday morning, he added, “The unexpectedly good first quarter 3.2% GDP was greatly helped by Tariffs from China. Some people just don’t get it!”

He’s right about that. Nearly all economists, including some who work for him, believe that tariffs are costly to the economy, and that American consumers will bear at least some of the burden as the Trump Administration raises the tariff rate from ten per cent to twenty-five per cent on thousands of imported Chinese products, including glassware, motorboats, vacuum cleaners, and metal doors and windows. When Larry Kudlow, Trump’s top economic adviser, appeared on Fox News on Sunday, the host Chris Wallace pointed out that tariffs are, in effect, taxes that are often passed on to consumers as higher prices. “Fair enough,” Kudlow replied. “In fact, both sides will pay. Both sides will pay in these things.” Evidently, Kudlow didn’t explain this to his boss, or Trump didn’t listen.

Kudlow also argued that it is worth bearing the short-term pain of a trade war to force China to open up its vast economy to American firms on a fairer basis. Conceivably, Trump could make this case, too—and, if he did, he would have a good deal of support from U.S. business leaders and even some Democratic officials. But instead he has promoted the fiction that trade wars are painless and easy to win. In his Monday-morning tweets, he insisted, “There is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today.” He went on to suggest that Americans could “by [sic] from a non-Tariffed country” or “buy the product from inside the USA (best idea.) That’s Zero Tariffs.”

Doubtless, Trump will be taking his own advice. He could begin by trying to buy himself a shiny new iPhone XS on which to bash out more pearls of economic wisdom. Unfortunately, he won’t be able to find one that isn’t made in China. If he goes ahead with the purchase anyway, and his Administration follows through on its threat to widen its tariffs to all Chinese imports, not just the ones currently targeted, he could end up paying an extra hundred and sixty dollars for the new phone, which currently costs about a thousand dollars, according to Morgan Stanley. Apple assembles practically all of its iPhones, iPads, and other products in mainland China, as do many other U.S. companies. Even if these firms took Trump’s advice and tried to shift production to other countries, or to the United States, it would take them months or years to do it.

After he settles on a pet theory, he’s largely oblivious to reason, and can only be shifted by brute force—the sort of force that can only be applied by sharply falling approval ratings, or, even more potently, sharply falling stock prices. You only have to glance at Trump’s Twitter feed to know that he is obsessed with the stock market and believes it is a key to his political appeal. Here’s a somewhat random example from last Friday: “The average 401(k) balance has SOARED since the bottom of the market - 466%. Wow!”

He shouldn’t have tempted fate. On Monday morning, shortly after he said that China shouldn’t retaliate against his Administration’s latest moves, the Chinese government announced it would do just that. The tariffs it imposes on a range of U.S.-made goods—including vegetables, beer, and liquified natural gas—would be raised significantly, the Chinese foreign ministry said. If the timing of this announcement, which came just before the opening bell on Wall Street, was intended to spook American investors, it worked. As soon as trading started, the Dow plunged almost five hundred points from the previous close, and fell further from there. At the end of the trading session, it was down six hundred and eighteen points—or about 2.4 per cent—at 25,325.

By itself, this wasn’t an earth-shaking development. Since the start of 2019, the Dow has risen sharply, and even after Monday’s fall it is up by about eight and a half per cent. But it has also fallen about four and a half per cent in a week. That’s a significant move, and it indicates that investors are reappraising their optimistic view of the future in light of Trump’s revving up of his trade war. If both sides now dig in—no further negotiations have been scheduled—the sentiment in the market could turn even more sharply negative, producing more days like Monday.
Video From The New Yorker
The Ice Stupas

It is largely about expectations. In recent months, financial markets around the world have rallied on the basis of three beliefs: the Federal Reserve wouldn’t raise interest rates any further, the United States and China would resolve their differences over trade, and the world economy would rebound from a significant slowdown last year. The renewed threat of an all-out trade war between Washington and Beijing undermines the last two of those beliefs and renders the first one moot.

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Our Columnists

That’s obviously worrying news for the economy over all, as well as for investors and purchasers of goods made in China. Just how big the hit could be depends on what happens next. Over the weekend, economists at Goldman Sachs and UBS estimated that, on a stand-alone basis, the impact of the new tariffs would be relatively small: a reduction in G.D.P. of less than half a percentage point. But both studies pointed to the risk of further escalation evident in Trump’s threat to broaden tariffs to all Chinese imports. (On Monday, he said he hadn’t decided to go through with this move.) “If we move into that next tranche of tariffs, we are one hundred per cent in uncharted territory,” Rob Martin, an economist at UBS, told the Times. The Goldman Sachs analysis warned of another danger, too. It said that “if trade tensions sparked a major sell-off in the equity market the growth impact could worsen considerably.”

Trump didn’t immediately react to Monday’s fall in the stock market. He did reiterate his plans to meet with Xi Jinping, the Chinese leader, at next month’s G20 summit, in Osaka, Japan. But that summit isn’t for another six weeks, which is a long time for fast-moving financial markets. And for Trump, despite his best efforts to avoid it, reality is already biting.

    John Cassidy has been a staff writer at The New Yorker since 1995. He also writes a column about politics, economics, and more for newyorker.com.Read more »
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Offline K-Dog

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Re: Big Slide v2.0 Begins
« Reply #724 on: May 15, 2019, 08:57:10 AM »
Seems like a time to sell short and when things look like they might work out to take a bump.  I have no idea about such things, but to some this is opportunity?  Unless this is the slide in which we are fried?
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Offline RE

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Re: Big Slide v2.0 Begins
« Reply #725 on: May 15, 2019, 09:08:42 AM »
Seems like a time to sell short and when things look like they might work out to take a bump.  I have no idea about such things, but to some this is opportunity?  Unless this is the slide in which we are fried?

That is generally the BTFD (buy the fucking dip) market strategy that Zero Hedge tends to follow, and which overall has worked pretty good for the Algos that employ it.  However, the volatility is so rapid that a human trader can't really keep up with this, and then you have all those transaction fees to deal with also.

As usual, it's about impossible to say if this si the beginning of the BIG ONE or just more bouncing around until some sort of "deal" on trade is worked out.  If Trumpovetsky persists though, it's going to really hit the overall economy very hard, and that won't help his reelection chances.

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Re: Big Slide v2.0 Begins
« Reply #726 on: May 15, 2019, 12:55:58 PM »
Seems like a time to sell short and when things look like they might work out to take a bump.  I have no idea about such things, but to some this is opportunity?  Unless this is the slide in which we are fried?

That is generally the BTFD (buy the fucking dip) market strategy that Zero Hedge tends to follow, and which overall has worked pretty good for the Algos that employ it.  However, the volatility is so rapid that a human trader can't really keep up with this, and then you have all those transaction fees to deal with also.

As usual, it's about impossible to say if this si the beginning of the BIG ONE or just more bouncing around until some sort of "deal" on trade is worked out.  If Trumpovetsky persists though, it's going to really hit the overall economy very hard, and that won't help his reelection chances.

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Big Money is having a fire sale this summer. What a great time for a crisis correction  :icon_sunny:
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