Posted July 06, 2018
By Byron King
The Doomsday Clock Just Hit Midnight
Dear Rundown Reader,
Theres no stopping things now.
The long talked about and highly debated U.S. tariffs went into effect this morning.
Its time to dig in. This is going to be a long, drawn out fight.
What sectors will get hurt worst? How will the dollar react?
Can businesses find alternative markets to weather the storm?
Todays Rundown examines all of this, as the market doomsday clock strikes midnight.
But first a letter on yesterdays Einhorn issue:
His investors sound like a bunch of babies who were not paying attention to their investments.
According to various reports, the problem is Einhorns client are locked out of making such decisions. And thats a bad spot to be in as a client with millions on the line.
Your Rundown for Friday, July 6, 2018
Trumps Tariffs Go Into Effect, China Reacts In Kind
The first round of Trumps tariffs kicked in at 12:01 a.m. today.
According to Bloomberg, three minutes later China enacted its first round of billion dollar tariffs on U.S. goods.
Surprisingly, the pre-market reaction is muted.
Perhaps were lucky today was the day tariffs went live.
A lot of Wall Street players probably took long weekends thanks to the July Fourth holiday.
Mondays action could be a lot more volatile as reality sinks in.
Up until Thursday, there was hope that cooler heads would prevail.
Now we know, theres no chance of that.
Trump, not to be outdone by Chinas retaliation this morning, has doubled down on his trade war stating he may ultimately target over $500 billion worth of Chinese goods, as reported by Reuters.
And CNBC reports, Commerce Secretary Wilbur Ross has said: Theres no downside level in the stock market that would change Trumps trade policy.
Diplomacy has failed.
And heres what you could expect next.
Many large, multinational companies could bear the brunt to start. Companies like Boeing (NYSE: BA) and 3M (NYSE: MMM) are examples.
Consumer staples and basic material sectors could get quite dicey too.
Currency traders should also take note, the dollar is down this morning and tariffs could mute its recent strength.
Now heres the positive spin.
Companies could find other markets to offload their goods. Brazil could buy our soybeans for example.
We do have a strong underlying economy as well.
Strong earnings and another positive jobs report could help mute the effects of the trade war.
Our advice to you?
Enjoy your Friday. Have a great weekend and wait until Monday to see how markets really take the news.
Now, turning to the markets this morning...
Market Rundown for Fri., July 6
Yield on the 10-Year Treasury sits at 2.829% this morning, down 0.011.
S&P 500 futures are down 5.50 at 2,733.
Oils down $0.49 to $74.25.
Golds down $3.20 to $1,255.
Bitcoin goes for $6,571 this morning, according to CoinDesk.
Well talk again on Monday.
Have a great weekend.
For the Rundown,