I was knee-deep into a project this morning ... wasn't going to write ... but then saw that the Dow was down over 400 points on the heels of yesterday's sharp decline.
What is going on? Trade, rather ... trade wars.
Over the last few weeks investors got comfortable with the thought that we in the late stages of a partial agreement with China ("Phase 1") which would take place soon and be a precursor of a stronger and lasting agreement ahead. A comment this morning by the President indicated that he would have no problem waiting until after next year's election ... certainly far past what many hoped for. Is this one of his negotiating ploys to bring China to the table or to force them to make further concessions? Or is he serious? No one knows ... but keep in mind that investors hate uncertainty ... and that seems to be something we have in spades right now.Adding to all this, of course, was yesterday's announcement that the U.S. would "restore" tariffs on steel and aluminum from Brazil and Argentina. And we still had more ammo in the tariff bag as was followed up by a threat last night to place 100% punitive tariffs on a group of goods from France over that country instituting a digital tax affecting some U.S. companies.What I found incredibly interesting ... in addition to all this ... is a note in Daily Shot this morning that cites a survey by Creighton University in which 77% of responding supply managers expect consumers to pay the cost of the tariffs. Why did I find this interesting? Because a majority of these managers (60%) support continuing "... or even expanding ..." ... trade restrictions and tariffs on imports from China. But what I would certainly love to find out are the consumer's views.And speaking of consumers, I would like to point out the record set yesterday for Cyber Monday purchases. People don't buy when there is a great deal of concern about the future ... they save for a rainy day that they are convinced will shortly arrive. It seems we are still confident about the future ... tariff talks aside.The final story below has to do with the growing (in dimension) population and the increase in the number of pre-diabetic children. I don't want to end this on a sad note ... as a 400 point Dow drop is sad enough ... so will finish with a fairly dumb story.Quick ... Who is bigger ... Mr. Bigger or Mr. Bigger's son? Answer: Mr. Bigger's son. He's a little Bigger.This goes over well with a 7th grade audience.... and some of my friends. ... as of 11:50 AM today ...
Markets are taking it on the chin this morning as the President stated that the trade deal with China might not take place until sometime after next year's election ( CNBC
)... but tariffs have been "weaponized" not only with China, but with others. Yesterday it was Brazil and Argentina ... today it is France ... tomorrow ... who knows? (TechCrunch)... and adding to investor angst are comments such as this ... in which one strategist (known for being bearish) writes that we are on the brink of a great depression ( Forbes
)... but wait a minute ... don't we have jobs? One big question is the quality of the jobs we are getting ... for if you leave as head of manufacturing and become an Uber driver ... it's a job, isn't it? ( CBSNews
)Well, we surely did heck of a lot of shopping yesterday ... as a record was set in online sales ... causing some to wonder why every day can't be Cyber Monday? ( FoxBusiness
)... and it you bought something and don't like it? Don't worry ... it is probably returnable ... something most consumers plan on doing for at least one item received ( CNBC
)Kids are getting bigger all the time and health issues may follow ( CNN