Baltic Dry Index. 1040 +08 Brent Crude 72.21
Never ending Brexit now October 31,
maybe.
Trump’s Nuclear Tariffs Now In
Effect.
USA v EU trade war postponed to
November, maybe.
“What do you like doing best in the world, Trump?"
"Well," said Trump, "what I like best-" and then he had to stop and think. Because although making trade wars was a very good thing to do, there was a moment just before you began to trade war which was better than when you were, but he didn't know what it was called.
"Well," said Trump, "what I like best-" and then he had to stop and think. Because although making trade wars was a very good thing to do, there was a moment just before you began to trade war which was better than when you were, but he didn't know what it was called.
With apologies to A.A. Milne, The House at Pooh Corner.
First the good news, Trade War Team Trump
are reversing the steel and aluminium tariffs on Canada and Mexico, improving
the chances of the USMCA getting
ratified, the new NAFTA. Other than causing turmoil in US companies that used imported
steel and aluminium, little seems to have been accomplished and no national
security issue has been addressed.
President Trump then declared some auto
imports to be a national security threat, though not for six months.
U.S. lifts tariffs on Canadian, Mexican metals in boost for trade pact
May 17, 2019 / 4:23 PM
WASHINGTON/OTTAWA (Reuters) - The United
States struck deals on Friday to lift tariffs on steel and aluminum imports
from Canada and Mexico, the three governments said, removing a major obstacle
to legislative approval of a new North American trade pact.
The separate
agreements, which will not impose U.S. quotas on Canadian and Mexican metals
shipments, will also eliminate Mexican and Canadian retaliatory tariffs on a
broad range of U.S. products, including pork, beef and bourbon.
The United
States and Canada said their agreement will be implemented by Sunday afternoon,
and includes new curbs aimed at preventing dumped steel and aluminum from China
and other countries from entering the U.S. market via Canada.
President
Donald Trump had imposed the global “Section 232” tariffs of 25% on steel and
10% on aluminum in March 2018 on national security grounds, invoking a 1962
Cold War-era trade law.
Both Canada
and Mexico argued for 14 months that their metals industries posed no security
threat as their economies are integrated with the United States, and challenged
the tariffs before the World Trade Organization.
“This is
just pure good news for Canadians,” Canadian Prime Minister Justin Trudeau told
reporters after announcing the deal to workers at Stelco Holdings Inc’s steel
mill in Hamilton, Ontario.
Stelco
shares soared 11 percent on the news, while top U.S. steelmaker Nucor fell 3.1
percent and U.S. Steel Corp, which had seen massive profit improvement because
of the tariffs, fell 1.2 percent.
Spokesmen for U.S. Steel and Nucor, which
had advocated for maintaining strong tariff protections, could not be reached
for comment.
The metals
tariffs were a major irritant for Canada and Mexico and had caused them to halt
progress toward ratification the new U.S.-Mexico-Canada Agreement, the
trilateral trade deal to replace the 25-year-old North American Free Trade
Agreement.
U.S.
lawmakers with constituents suffering from Canadian and Mexican retaliation,
including Senate Finance Committee Chairman Chuck Grassley, also said they
would not consider a USMCA vote with the tariffs in place.
---- Trudeau
said Canada would now work with the United States on the timing of USMCA
ratification and said he was optimistic Canada would be “be able to move
forward well in the coming weeks”.
U.S. Vice
President Mike Pence said he would meet with Trudeau in Ottawa on May 30 to
discuss “advancing” ratification.
Several U.S.
Democrats applauded removal of the tariffs, but said USMCA was not yet ready
for their support.
“When it
comes to the new agreement, House Democrats continue to have a number of
substantial concerns related to labor, environment, enforcement, and access to
affordable medicines provisions. Those issues still need to be remedied,” said
House Ways and Means Committee Chairman Richard Neal.
More
Trump declares some auto imports pose national security threat
May 17, 2019 / 1:32 PM
WASHINGTON (Reuters) - U.S. President
Donald Trump on Friday declared that some imported vehicles and parts pose a
national security threat but delayed a decision for as long as six months on
whether to impose tariffs to allow for more time for trade talks with the
European Union and Japan.
The
unprecedented designation of foreign vehicles imported to the United States
from some of its closest allies sparked anger from automakers, dealers and
foreign governments after a White House document hinted it would seek voluntary
export quotas on autos from U.S. trading partners.
Toyota Motor
Corp, which said in March it is investing $13 billion in U.S. operations
through 2021, called the designation “a major set-back for American consumers,
workers and the auto industry” and said it sent the message “our investments
are not welcomed.”
European
Trade Commissioner Cecilia Malmstroem said on Twitter that “we completely
reject the notion that our car exports are a national security threat. The EU
is prepared to negotiate a limited trade agreement (including) cars, but not
WTO-illegal managed trade.”
---- On Friday, Trump continued his rhetoric attacking foreign imports from the EU. “They have trade barriers. They don’t want our farm products, they don’t want our cars. They send Mercedes-Benz’s in here like they’re cookies,” he told a group of real estate agents. “They send BMWs here. We hardly tax them at all.”
The
president had faced a Saturday deadline to make a decision on recommendations
by the Commerce Department to protect the U.S. auto industry from imports on
national security grounds and imposing tariffs of up to 25 percent.
---- Automakers warned the tariffs cost hundreds of thousands of auto jobs, dramatically raise prices on vehicles and threaten industry spending on self-driving cars.
A group
representing major German and Asian automakers including Daimler AG, Volkswagen
AG, Honda Motor Co and Nissan Motor Co, called the suggestion some auto imports
are a national security risk “absurd.”
The group
added that “no one in the industry has asked for tariffs or other ‘protection’
from the government.”
More
Now
comes the bad news. President Trump has
added Europe to his trade war rhetoric right before Europe votes in the
European elections. No meddling there then, blame it on the Russians. The trade
war with China continues to worsen. Global recession looms, no matter how many
stock promoters spin otherwise.
Trump says EU treats U.S. worse than China does on trade
May 17, 2019 / 8:19 PM
WASHINGTON
(Reuters) - President Donald Trump said the European Union is less fair to the
United States on trade than even China, which is embroiled in a months-long
trade war with Washington.
“The
European Union treats us, I would say, worse than China, they’re just smaller,”
Trump told a gathering of real estate agents in Washington.
China's tough rhetoric leaves trade talks with U.S. in limbo
May 17, 2019 / 3:29 AM
WASHINGTON/BEIJING (Reuters) - China
struck a more aggressive tone in its trade war with the United States on
Friday, suggesting a resumption of talks between the world’s two largest
economies would be meaningless unless Washington changed course.
The tough
talk capped a week that saw Beijing unveil fresh retaliatory tariffs, U.S.
officials accuse China of backtracking on promises made during months of talks
and the Trump administration level a potentially crippling blow against one of
China’s biggest and most successful companies.
Chinese
foreign ministry spokesman Lu Kang, asked about state media reports suggesting
there would be no more trade negotiations, said China always encouraged
resolving disputes with the United States through dialogue and
consultations.
“But because
of certain things the U.S. side has done during the previous China-U.S. trade
consultations, we believe if there is meaning for these talks, there must be a
show of sincerity,” he told a daily news briefing.
The tough
talk capped a week that saw Beijing unveil fresh retaliatory tariffs, U.S.
officials accuse China of backtracking on promises made during months of talks
and the Trump administration level a potentially crippling blow against one of
China’s biggest and most successful companies.
Chinese
foreign ministry spokesman Lu Kang, asked about state media reports suggesting
there would be no more trade negotiations, said China always encouraged
resolving disputes with the United States through dialogue and
consultations.
“But because
of certain things the U.S. side has done during the previous China-U.S. trade
consultations, we believe if there is meaning for these talks, there must be a
show of sincerity,” he told a daily news briefing.
China
has yet to say whether or how it will retaliate, although its state media is
sounding an increasingly strident note. The ruling Communist Party’s People’s
Daily published on Friday a front-page commentary that evoked the patriotic
spirit of the country’s past wars.
More
IMF's Lagarde says U.S.-China trade war could be risk for world economic outlook
May 17, 2019 / 5:35 PM
TASHKENT
(Reuters) - The trade war between the United States and China could be a risk
to the world economic outlook if it is not resolved, International Monetary
Fund Managing Director Christine Lagarde told Reuters on Friday during a visit
to Uzbekistan.
“Obviously,
the downside risk that we have is continued trade tensions between the United
States and China,” Lagarde said, referring to the IMF’s world economic outlook.
“And if
these tensions are not resolved, that clearly is a risk going forward.”
The IMF last
month cut its growth forecast for 2019 to 3.3%, down from the 3.5% it had
previously predicted.
It warned at
the time that growth could slow further due to trade tensions and a potentially
disorderly British exit from the European Union.
“But we expect
that at the end of 2019 and in 2020 it will bounce back,” Lagarde said of the
world economic outlook on Friday.
The United
States infuriated China this week when it announced it was putting Huawei
Technologies Co Ltd, the world’s biggest telecoms equipment maker, on a
blacklist that could make it hard to do business with U.S. companies.
On Friday
Beijing suggested a resumption of talks between the world’s two largest
economies would be meaningless unless Washington changes course.
A group of superrich investors, spooked by China and potential ‘black swans,’ raises cash to levels not seen in years
Published: May 17, 2019 10:49 a.m. ET
The rich
appear to be losing faith in this bull market.
The 750
members of Tiger 21, a coalition of investors with some $75 billion in assets,
increased their cash holdings by 20% in the first quarter, bringing the group’s
total allocation to levels not seen since the start of 2013. The move also
marks Tiger 21’s first cash-raising effort in three years.
Here’s where
Tiger 21’s allocation stands now:
----The ongoing tariff tiff with China tops their long list of market concerns, along with an unsustainable budget deficit and the failure to make progress with North Korean relations. A bigger cash pile will also come in handy, they say, in the face of any other “black swan” events that could rattle stocks.
Tiger 21 President Michael Sonnenfeldt told MarketWatch that members are also worried about “continued government dysfunction, failing infrastructure, stock markets being ‘priced to perfection’ and rising economic inequality leading to greater polarization in America and elsewhere.”
The group is backing away from hedge funds, but just slightly, while real estate, still the asset of choice, has steadily fallen out of favor, dropping from a peak of 33% in the second quarter of 2017 to the current 26% level.
Even as Tiger 21 has one foot on “the brake because of concerns about the expansion becoming a little long in the tooth,” Sonnenfeldt points out the group still has “one foot on the gas because of a long-term optimism about the economy.”
Private equity remains preferred over public — 25% vs. 22% — reflecting the “edge” that the wealthy members feel they get when investing directly in small companies where they might have direct interest or outright ownership.
Cash clearly hasn’t been the best place to be for the past few sessions, considering the major indexes have all bounced back from Monday’s rout. But the Dow DJIA, -0.38% was moving slightly lower in Friday trades.
S&P 500 due a 10% fall from pre-trade war high, warns strategist
By Barbara
Kollmeyer Published: May 17, 2019
9:32 a.m. ET
----While the initial shock appears to have passed, our call of the day, from Miller Tabak + Co.’s lead strategist Matt Maley, warns the stock market hasn’t finished selling off on news a trade deal could take much longer than expected.
“Therefore,
we believe the stock market has to reprice itself to the new uncertainties that
are involved. This should take more than just six days...and take the market
down by more than the 4.5% decline we had seen by Monday night,” said Maley.
(The S&P lost roughly that amount between a high of 2,945.83 reached April
30 and a close of 2,811 on Monday, May 13.)
He described
the small bounce seen by stocks this week as a “normal technical bounce” for a
market that got oversold, but cautions that too many people are starting to justify
the gains by saying the market blew trade tensions out of proportion.
Maley thinks
they are wrong and that investors shouldn’t keep chasing the stock market
higher, but instead hold off and try to figure out how to take advantage of the
decline he sees coming—7% to 10% from the April high.
Maley uses
an example from recent history to explain why the market isn’t done selling.
Last October, when Fed Chairman Jerome Powell shocked investors by saying
interest rates were far from neutral, stocks had to reprice that shock and new
reality, which resulted in a 20% selloff. He doesn’t think trade tensions will
merit that big of a pullback, but it’s worth something.
“Since this
is new-news and was totally unexpected by the markets, we need to see the
markets reprice themselves to it...more than it has so far,” he said.
More
“Xi said that Trump was very Bouncy, and that if they could
think of a way of unbouncing him, it would be a Very Good Idea. "Just what
I feel," said Juncker. "What do you say, May?"
May opened her eyes with a jerk and said, "Extremely."
"Extremely what?" asked Xi.
"What you were saying," said May. "Undoubtably.”
May opened her eyes with a jerk and said, "Extremely."
"Extremely what?" asked Xi.
"What you were saying," said May. "Undoubtably.”
With
apologies to A.A. Milne, Piglet, Tigger,
Rabbit, and Pooh.
The monthly Coppock Indicators finished April
DJIA: 26,593
+51 Down. NASDAQ: 8,095 +89 Down. SP500: 2,946 +55 Up.
The S&P has reversed to up largely as a result of
the Fed falling into line with President Trump’s demands, but with President
Trump wanting to be judged by the performance of the stock market and the Fed’s
Plunge Protection Team now officially part of President Trump’s re-election
team, probably the safest action here is still fully paid up synthetic double
options on most of the major indexes. This could all go very wrong very fast.
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