If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is
a duck.
This weekend we
ponder one of modern life’s great mysteries: is the US stock market rigged? Sadly,
the simple answer seems to be yes. US stock markets pass the world famous duck
test. But rigged by who and for whom, and
is it officially sanctioned?
Below, what could
possibly go wrong if China picks on Apple in response to Trump attempting to
smash China’s ZTE?
Dow gains 332 points, books best day in 3 weeks as Apple’s stock surges to record
Published: May 4, 2018 4:37 p.m. ET
Buffett bet on Apple lifts broader market, supporting tech sector
U.S. stocks logged sharp gains Friday, with major indexes shaking off an early slide as technology stocks—notably Apple Inc.—rallied, overshadowing uncertainty over tense trade talks between the U.S. and China and a weaker-than-expected rise in April nonfarm payrolls.What did the main benchmarks do?
The Dow Jones Industrial Average DJIA, +1.39% rose 332.36 points, or 1.4%, to end at 24,262.51, recovering from an earlier drop of about 150 points. The blue-chip average logged its biggest daily climb since April 10, according to FactSet data. However, the average has struggled lately, falling in nine of the past 13 sessions.The S&P 500 index SPX, +1.28% rose 33.69 points, or 1.3%, to finish at 2,663.42. The Nasdaq Composite Index COMP, +1.71% rose 121.47 points, or 1.7%, to close at 7,209.62, pushing the gauge back into positive territory for the week. All three indexes had opened lower.
Friday’s gains were broad based, with all 11 S&P 500 sectors higher on the day. Tech was by far the biggest boost to markets, though, gaining 2%.
Friday’s gains weren’t enough to push the Dow and S&P into positive territory for the week, with both posting 0.2% weekly declines. The Nasdaq turned positive for the five-session stretch, however, up 1.3%.
What’s driving markets?
Apple Inc. AAPL, +3.92% stock finished up 3.9%, boosting markets broadly after CNBC reported Berkshire Hathaway bought 75 million shares of the iPhone maker in the first quarter. The stock hit a record and was on track for its biggest weekly gain since October 2011.Read: 6 questions Warren Buffett should face at Berkshire Hathaway’s annual meeting
The U.S. created 164,000 new jobs in April, below the 188,000 that had been expected. Separately, the unemployment rate fell to 3.9% from 4.1%, the first time the jobless rate has dropped below 4% since the end of 2000.
In Beijing, U.S. and Chinese officials were meeting for discussions on tariffs and other trade issues. Worries about trade hostilities between the top two global economies have roiled financial markets in recent months.
Read: Here’s how sensitive the stock market has become to ‘trade war’ talk
The U.S. has handed China a lengthy list of demands, The Wall Street Journal reported, including a demand to reduce the bilateral trade deficit by at least $200 billion by the end of 2020. The deficit stood at $375 billion last year.
More
FAANG Stocks Swallow Up More of the Nasdaq Than Ever Before
By Brandon Kochkodin
The FAANG
stocks have set another record.
As earnings
season comes to a close, popular technology stocks are making up a bigger piece
of the pie than ever before. The FAANG block of Facebook Inc., Amazon.com Inc.,
Apple Inc., Netflix Inc. and Google now account for over 27 percent of the
NASDAQ Composite Index, a new all-time high.
Friday’s
jump comes on the back of Apple’s better-than-expected earnings coupled with
news of Warren Buffett’s latest purchase of shares in the
iPhone maker.
China said to be discussing ZTE ban with U.S. officials
May
4 2018
The Chinese government is reportedly going to bat
for ZTE over a
seven-year ban that would have broad ranging consequences for the phone
maker. According to a
new report from Reuters, the subject was broached during a meeting with
between senior Chinese and U.S. officials in Beijing this week.
The ban imposed by the Department of Commerce is the
result of a violation against U.S. Iranian sanctions. ZTE pled guilty, agreeing
to pay a fine and penalize employees. After the DOC insisted it failed to do
the latter, it barred US companies from selling software or components to the
phone maker for seven years. Between chip makers like Qualcomm and software
providers including, most notably, Google, the restrictions will prove next to
impossible for ZTE to circumvent.
For many, the steep penalty appears to be part of a
larger looming trade war between the two countries that’s also found ZTE and
Huawei caught in the crosshairs over ties to the Chinese government. U.S.
officials, however, have insisted that the ban isn’t related to trade issues
between the two countries.
Earlier this week,
the Pentagon banned the sale of both companies’ phones on military bases —
just the latest in a long line tough breaks here in the States. ZTE has largely weathered the broader U.S.
spying concerns better, due in part to a broader footprint in the States than
Huawei, but the company admitted that this latest ban would be downright
devestating.
“The Denial Order will not only
severely impact the survival and development of ZTE,” the company told
TechCrunch, “but will also cause damages to all partners of ZTE including a
large number of U.S. companies.”
More
Finally, in Great
Global Trump Trade War (GGTTW) news, nothing much of anything seems to have
come out of those “very good conversations” in Beijing. In Europe, however,
Germany looks ready to fold. Elsewhere, the GGTTW is already starting to go
awry.
U.S.-China Trade Talks End With Key Differences Still Unresolved
Bloomberg News
3 May 2018, 16:05 GMT+1 Updated on 4 May 2018, 12:17 GMT+1
Two days of U.S.-China trade
discussions ended in Beijing with an agreement to keep on talking, and little
else.
China’s official Xinhua News
Agency reported Friday afternoon that both sides reached a consensus on some
trade issues while acknowledging major disagreements on some matters. It said
they would continue discussions, without providing specifics for when they
would start again. Neither side briefed the media, and the U.S. delegation led
by Treasury Secretary Steven Mnuchin departed Beijing in the evening.
While a cure-all deal was
always a long shot, the discord between the world’s two biggest economies means
skittish global markets will continue to face ongoing trade tensions. The
immediate question -- which may not be answered until President Donald Trump takes
to Twitter -- is whether the U.S. got enough wins to delay planned tariffs of
up to $150 billion on Chinese imports.
“A
disagreement over trade practices that has built up over more than two decades
will take much more than two days to resolve,” said Shane Oliver, the head of
investment strategy at AMP Capital Investors Ltd. in Sydney. “A negotiated
solution remains most likely but it will take time with a lot of posturing and
near-death moments along the way.”
Heading into the talks, both sides outlined a series of tough demands, with the U.S. focused on reducing a deficit in goods it says reached a record $375 billion last year.
Read More: Here’s What the U.S., China Demanded of Each Other on Trade
The U.S. delegation asked China to reduce support for high-tech industries, allow U.S. companies non-discriminatory access in China and cut the trade deficit by at least $200 billion by the end of 2020 from 2018, according to a document seen by Bloomberg. It also called on China to avoid any retaliation, drop a pair of World Trade Organization cases and agree to quarterly reviews of its progress in meeting targets.
The Chinese side -- led by Vice Premier Liu He, President Xi Jinping’s top economic adviser -- asked the U.S. to stop its 301 investigation into Chinese intellectual property abuses, drop planned 25 percent extra tariffs on Chinese goods and end discrimination against Chinese companies in national security reviews, according to a separate document also seen by Bloomberg. China also asked the U.S. to open its e-payment market and approve China International Capital Corp.’s application for a financial license.
China also warned that U.S. companies may be excluded from its domestic market, saying any of its moves to reduce investment restrictions may not be applicable to American businesses if the Trump administration doesn’t agree to treat Chinese companies equally, the document said.
More
May 4, 2018 / 8:13 AM
Tinker, tailor, robot maker - In China, trade war threat casts long shadow
SHENZHEN/SHANGHAI, China (Reuters) - At its high-tech
laboratories in the Chinese manufacturing hub of Shenzhen, Beike Biotechnology
is developing medical robots that could help treat cancer. It has big plans to
export these to markets like the United States.
Those plans
are now under threat. The robots, which help develop cell cultures used in stem
cell therapies, are on a sprawling list of products threatened with steep U.S.
tariffs amid a simmering trade stand-off between Washington and Beijing.
The company
is already factoring U.S. tariffs into its plans and order pipeline for next
year and has tasked its sales teams with finding new markets to make up an
expected shortfall from the United States.
Beike, a
domestic leader in stem cell technology with government support and
long-standing ties overseas, illustrates the stakes for China Inc after
Washington and Beijing kicked off trade talks on Thursday and ended Friday.
Officials
from both countries reached a consensus on some aspects of the trade dispute,
but disagreements over other issues remain “relatively big”, China’s Xinhua
news agency said.
The talks
were held amid signs that trade frictions are growing. China’s major ports of
entry have increased checks on fresh fruit imports from the United States, five
Chinese industry sources told Reuters.
In the
meantime, manufacturers are watching developments nervously.
“The trade
sanctions between China and the U.S. will certainly have a huge impact on us,”
Hu Xiang, Beike’s founder and chairman, said at the firm’s Shenzhen
headquarters.
“We are
developing a completely automated cell culture robot, which comes within the
scope of the tariffs,” he said. He added that the company had received significant
purchase intent orders from U.S. buyers that could be hit hard.
More
May 4, 2018 / 11:08 AM
As Trump's tariffs bite, small U.S. manufacturers begin to tap the brakes
CHICAGO
(Reuters) - Encouraged by a booming demand for construction equipment, Mike
Haberman was planning in early February to hire at least 30 more workers for
the manufacturing facility of his Gradall Industries in Ohio.
That plan
now is shelved, Haberman said, because the cost of steel used in Gradall’s
telescopic excavators and vacuum trucks shot up by one-third following
President Donald Trump’s crackdown on steel imports. As steel costs account for
35 percent of his cost of production, he fears rising prices would not only
hurt his export sales, but also give an edge to foreign rivals at home.
“At this
point, we really need more visibility before we would bring in more workers,”
he told Reuters.
When Trump
signed a $1.5 trillion package of tax cuts at the end of 2017, supporters
predicted businesses would respond this year with a burst of hiring and
investment.
But Reuters
interviews with more than a dozen small to mid-sized manufacturing executives
and recent U.S. economic data reveal Trump’s protectionist trade policy is
starting to lead some of them to take a more cautious approach, and forcing
them to put new investment and hiring plans on hold.
More
May 4, 2018 / 4:29 PM
Exposed and dependent: Germany desperate to avoid trade war
BERLIN
(Reuters) - As Europe’s biggest exporter to the United States and with more
than 1 million German jobs at stake, Germany is desperate to avoid a European
Union trade war with the United States.
In the
run-up to a June 1 deadline for U.S. President Donald Trump to impose steel and
aluminum tariffs on the EU, Berlin is urging its European partners to show some
flexibility and pursue a broad trade deal that benefits both sides.
But that
puts Germany at odds with European peers such as France. Paris, the other half
of the motor driving European integration, resents Germany’s big trade surplus
and wants a tougher EU stance against the U.S. tariffs.
“There is a
great danger of slipping into a trade war that way,” Holger Bingmann, president
of Germany’s BGA foreign trade association, told Reuters.
Mindful of
data from the German-American Chambers of Industry and Commerce that shows more
than 1 million German jobs are directly or indirectly dependent on exports to
the United States, he cautioned against EU threats of counter tariffs.
“That way,
the Europeans would only embrace the logic of protectionists,” he said.
The European
Commission has said the EU will set duties on 2.8 billion euros ($3.36 billion)
of U.S. exports, including peanut butter and denim jeans, if its metals exports
to the United States, worth 6.4 billion euros, are subject to tariffs.
Berlin is
pushing the idea of an agreement to lower tariffs across a broad spectrum of
products, especially in manufacturing.
“We can
negotiate again ... but we should talk about all industrial tariffs,” said a
senior German official.
A French
official said there must first be a permanent and unconditional exemption for
the EU from the steel and aluminum tariffs, adding: “That’s the prerequisite
for any other option.”
More
Smoot and Hawley
ginned up The Tariff Act of 1930 to get America back to work after the Stock
Market Crash of '29. Instead, it destroyed trade so effectively that by 1932,
American exports to Europe were just a third of what they had been in 1929.
World trade fell two-thirds as other nations retaliated. Jobs evaporated.
Elaine Chao
The monthly Coppock Indicators finished April.
DJIA: 24,163 +255 Down. NASDAQ:
7,066 +282 Down. SP500: 2,648 +188 Down.
All
three slow indicators moved down in March and continued down in April. For some
a new bear signal, for others a take profits and get back to cash signal.
Nice Blog keep sharing more information about manufacturing equipments.
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