Dow rebounds more than 100 points at the open after Trump predicts a quick resolution to trade war https://t.co/RAyeUsi5qN
— CNBC (@CNBC) May 24, 2019
The indexes got a small reprieve on Friday after President Donald Trump said the ongoing trade war could be over quickly.
“The growing worries around a US/China elongated trade battle and its implications on the tech space are heavily weighing on the minds of both investors and the companies themselves caught in the cross hairs,” Dan Ives, analyst at Wedbush Securities, wrote in a note to clients. “The ‘poster child’ for the US/China trade wars continue to be Apple with the stock under heavy pressure as many competitors are yelling fire in a crowded theater around the potential China impact to Cupertino if this situation worsens.
Over Quickly?
The only way the trade war will be over quickly is if Trump caves in and reduces demands on China.
Let’s chalk up another lie.
Apple Faces Another Blow
Bloomberg reports Apple’s China Business Faces Another Blow From Trump’s Huawei Ban.
The U.S. crackdown on Huawei Technologies Co. could make Apple Inc.’s already troubled business in China even more difficult, hobbling iPhone sales in the world’s biggest smartphone market and disrupting the company’s supply chain, according to analysts.
Last week, U.S. President Donald Trump effectively banned U.S. companies from working with Huawei. That’s sparked concern on Wall Street about potential retaliation by China, where iPhones are assembled and where Apple gets about a fifth of its revenue.
“There is a potential for a boycott” of Apple products, said Shannon Cross of Cross Research. “There could be a movement in China to support national champions.”
Apple could lose nearly a third of its profit if China retaliated by banning its products, Goldman Sachs analysts estimated this week.
Trump’s Trade Hypocrisy
Security Threat and No Threat
Amusingly, Huawei is and isn’t a Security Threat.
Trump banned Huawei on grounds it’s a major security threat.
Yet, Trump announced that the company could be part of a trade agreement that once again may be just around the corner.
Since when does the US bargain away genuine security threats?
Campaign Issues
Trump handed the Democrats huge campaign issues on a silver platter.
Yet, all the Democrats want to talk about is impeachment and absurd Russiagate claims now thoroughly discredited.
Barring recession, Trump has a very good chance of returning to the White House.
Unfortunately, for Republicans, (fortunately, for Democrats) a recession is very likely.
Drown Your Sorrows
The election losers will drown their sorrows. But that will be more expensive, thanks to Trump: The Beer Industry Blames Trump’s Tariffs for Loss of 40K Jobs.
A report by two trade groups showed U.S. beer-industry jobs dropped 40,000 since 2016 as metal tariffs boosted aluminum-can costs, leading to a drop in investment.
“Aluminum tariffs are increasing brewers’ costs and are an anchor on a vibrant industry,” Jim McGreevy, the chief executive officer of the Beer Institute in Washington, said in an emailed statement. “Each brewer is deciding for themselves how to absorb that expense, whether it’s raising prices, laying off workers or delaying innovation and expansion.”
The shipping and logistics charge for delivering aluminum to the U.S. Midwest, known as the “premium,” more than doubled as Trump slapped a 10% tariff on imports of the metal. Molson Coors Brewing Co. estimated last year that the levies would create a $40 million hit to its bottom line.
Tariffs are likely not the primary reason people are drinking less beer. But Tariffs are to blame for shrinking profits.
Soon and Very Soon Tribute
I am sure there will be a trade deal soon and very by the self-proclaimed deal-making king himself.
In fact, I can guarantee it.
Of course, the king gets to set the meaning of soon.
Mike “Mish” Shedlock
The Chinese have patriotic songs going viral about how they need to stand together against Trump trying to oppress them (but they like regular Americans).
I definitely think they are missing the forest for the trees, but it doesn’t really matter what I think.
The trade war has been going for fifty years of Chinese wins. The next fifty years get interesting. So far only 25% of Chinese wheat is infested with fusarium. Only 40% of the Chinese meat supply has been slaughtered for African swine fever. Only 25% of Chinese crops are infested with autumn cut worm. Tariffs are only 25%. China still has dollars left, but crypto currencies are fixing that. Currency manipulation tariffs have not cut in yet.
“Of course, the king gets to set the meaning of soon.”
The meaning of words spoken by King Chaos are at best transient. And most often, worthless.
Deal? There can NOT be a “meeting of the minds”…if one is a “no show”.
The Trump negotiation team have written the agreement and delivered it to Xi for his signature. The trade war could be over instantly. Otherwise ever increasing tariffs will crush the Chinese economy.
Good luck to your arrogance!
I have a couple of questions:
How did you become one of the privileged few to learn about this agreement delivered to President Xi?
I know you are a college instructor. So perhaps you can tell us how long and how much it will take to build rare earth processing plants in this country (or even in other countries not China) to replace these products should Xi decide to not sell them to the US? Oh, include pollution control costs in your estimate please.
What will we do to manufacture our electronics and military equipment requiring rare earth materials while we are waiting for the plants to be built?
Lighthizer said the Chinese returned the agreement with previously agreed portions crossed out or removed. My interpretation may be incorrect. However when you have an overwhelming bargaining advantage you don’t need to screw around.
I am not a college teacher.
The California rare earth plant is producing at a low level. I read that. The White House began planning to increase California rare earth elements in 2017. I read that. Most construction projects of a manufacturing facility don’t take all that long. There are other rare earth facilities in South Africa and other places. If China played that card they most likely would lose their whole rare earth market forever to embargoes.
Mish it would be good to see a post on how much of the stock market runup since Trump has been based on buybacks that were actually loans. I believe David Rosenberg had a slide on this at the Mauldin investor conference. At some point this is destined to blow up in everyone’s face. The stock market would likely be much lower if not for loans buying back shares. Rosenberg showed it wasnt even thr tax cut. Corporations don’t spend their own money anymore.
“Yet, all the Democrats want to talk about is impeachment and absurd Russiagate claims now thoroughly discredited.”
Democrats have already passed bills to reform our elections, secure our election system from foreign attack, improve healthcare and bring down the cost of prescription drugs, protect patients with pre-existing conditions, and support women’s rights by standing up for equal pay and against violence against women. Democrats have addressed many other important issues with good legislation — too many to list here, in fact — while Republicans are so terrified of getting on the wrong side of Trump that they refuse to even consider any bills at all.
The only policy that Trump has is “build a wall” which is not only ludicrous on it own right, but a complete non-starter. Yet another “infrastructure week” got blown up by Trump’s hissy fit as Nancy goaded him into acting like a brat in public (the prior “Best Disaster Award for Infrastructure Week” was Trump’s “good people on both sides” speech).
Zero Hedge: Trump Plans Executive Order To Help Lower Health-Care Costs
Google, Facebbook and Twitter are meddling in our elections. They FAR outweigh any foreign meddling.
There is another, more traditional, term for meddling in elections. It’s called freedom of speech. Used to be fashionable over her, before the progressive rabble took over.
For a second there I somehow had the feeling that republicans and Trump hated Obama because he governed by “executive orders”. My bad.
“For a second there I somehow had the feeling that republicans and Trump hated Obama because he governed by “executive orders”. My bad.”
Actually, that one is called enforcing anti trust law. Transparent pricing.
Of course, like all things progressives are involved in, none of it has even a theoretical chance of actually working. So, prescription drugs are priced higher now than they were last year. Just as is the case every year. Broader healthcare costs have gone through the roof. Obamacare premiums pretty much doubled since that particular dunce was dimbulb-in-chief.
Ol’e Adolf also reformed election systems. As did, no doubt, Chavez. It’s a rather fashionable thing to do, for those who stand to benefit from the rigging. As is attempting to ban others from speaking freely, under guise or mindlessly relabeling free speech as “attacking.” And, of course, nothing beats the old canard mandating that pay decisions, along with all other decisions, be a matter of national policy. Rather than a decision made by free individuals. I mean, what kind of a progressive hellhole would this be, if Dear Leader couldn’t even mandate how much of an allowance some mere underling paid his son and daughter in exchange for moving the lawn?
But hey, even if nothing else does, at least the public indoctrination systems seems to be working as intended.
Sure – only you know how things really work. I’ll let that sink in a bit.
You have created a granfalloon and decided that it is always wrong and you are always right. Anybody you don’t happen to like is a member of the granfalloon and you get to be nice and smug.
“As is attempting to ban others from speaking freely, under guise or mindlessly relabeling free speech as “attacking.””
Totally agree that is why I think the NDAs that Trump forces people to sign to work in the WH should not be allowed. You know free speech and all.
And sure nothing speaks free speech like asking or recommending the NFL to fire the players that keel to you know express their opinions.
I really love how snowflakes the republican become once they lose power
That is the thing with all right wing nuts the only valid free speech is the one that supports their cause. The rest is treason for sure.
“Yesterday: TRUMP SAYS HE’LL SEE CHINA’S XI AT G-20 MEETING
Today: NO OFFICIAL TALKS ABOUT XI, TRUMP MEETING: CHINA ENVOY”
i think there was some international confab where Trump was not scheduled to have a meeting with Putin. Trump and Putin had some sort of chat, regardless.
A lie? A little unhinged today?
A couple years ago, I read on this site, that we could be in recession in a few months.
Was that a lie?
Lighten up Francis!