Fun

Dow Recoils After Trump Trade Guru Dangles 100% Tariff Threat

News Feed - 2019-09-20 03:09:11

The Dow"s dramatic reversal sputtered on Thursday, as the post-Fed rally ran out of steam amid a burgeoning crisis in the Middle East and warnings that China tariffs could go as high as 100%.


Supporting the Dow, bulls appear to be ignoring the fact that the FOMC is technically in a holding pattern, preferring to trust that economic trends will force a divided Federal Reserve to cut interest rates again this year. Dow Jones Shudders at Prospect of Trade War Escalation


Despite heading toward a triple-digit rally during the morning session, the Dow Jones Industrial Average turned negative in late afternoon trading. At last check, the Dow had lost 17.48 points or 0.06% to settle at 27,129.60. The Dow failed to press higher on Thursday as geopolitical risks grew in the Middle East and China. | Source: Yahoo Finance


The broader stock market was virtually flat as the S&P 500 and Nasdaq posted cautious gains of 0.11% and 0.15%. Brent crude oil bounced over 1.15%, while gold slid markedly, down 0.51%. A softer US dollar was sharply lower against the Japanese yen and British pound, helping to cushion equity markets.


One of Donald Trump"s top advisers on China sent the markets into a tizzy when he claimed that the US might seek 50% or even 100% tariffs on Chinese goods in an attempt to win the trade war, but downplayed that Trump was trying to force "Cold War 2.0."


The Dow Jones clearly disliked even the hint of trade war escalation, and money flowed out of the stock market into havens like US bonds. Iran Crisis Reaches Boiling Point The Iran crisis continues to grow direr. | Source: Nicholas Kamm/Ho/AFP


Any hopes of a détente with Iran are fading into thin air as the OPEC member warned against “all-out war” with the US if there are any retaliatory strikes. This is more a return to the status quo than an escalation, and the stock market did not have a visible reaction to these threats.


Despite the resilience of the Dow Jones to these hawkish comments from Iran’s Zarif, it is clear the Trump administration is at a crossroads. While Trump has opted to increase economic sanctions, Mike Pompeo has been in Saudi Arabia amid talk of forming a coalition to counteract Iranian aggression.


Any further disruption in the oil markets could be extremely detrimental for risk appetite, as we saw after the massive spike in crude on Monday. Stock Market Bets on Fed Cuts Despite Neutral Dot-Plot



As the Dow continues to climb, it is clear that investors believe that there is more easing coming from the Federal Reserve.


Providing a concise explanation of why the stock market has changed its outlook so rapidly, Bill Diviney, Senior Economist at ABN AMRO, advocates for more rate cuts by focusing on some of Jerome Powell’s wording in his press conference, as he writes: “We continue to expect a further weakening in the macro data over the coming months, and on balance we expect this to ultimately drive the Fed to cut by more than it is currently signalling (see our preview for more). Indeed, in signalling this possibility, Chair Powell notably avoided repeating the ‘mid-cycle adjustment’ phrase used at his last press conference, pointed to ‘additional signs of weakness abroad and a resurgence of trade policy tensions’, and said that, while not the Committee’s expectation, ‘a more extensive sequence of rate cuts could be appropriate’ if the economy turns downward.”


Looser monetary policy has generally been good for stocks when there is buying appetite. But, as the flight to value demonstrates, the general trajectory of the economy appears to be lower, which can only be bearish for the Dow Jones over the longer term. Dow Stocks: Microsoft Flies on Increased Dividend


The Dow 30 was supported by Microsoft on Thursday, as the software company flew 1.81% on news that it was announcing a $40 billion share buyback and increasing its dividend.


This helped lift other tech stocks, as IBM also climbed 0.60%.



However, Apple stock continues to struggle, failing to regain its momentum after Goldman Sachs trashed its accounting after the launch of Apple TV. AAPL shares lost 0.87%.


Nike was 0.57% lower on a day as headlines revealed that scandal-embroiled New England Patriots wide receiver Antonio Brown was no longer one of its athletes.


Click here for a live Dow Jones Industrial Average chart. This article was edited by Josiah Wilmoth.

News Feed

Ethereum validator P2P.org hits $7.5B TVL, adds new SaaB model
Helen Partz10 hours agoEthereum validator P2P.org hits $7.5B TVL, adds new SaaB modelP2P.org’s new SaaB model aims to help businesses better handle staking functionalities, promotion and revenue generation.1512 Total v
Nigerian officials proposed secret crypto settlement, claims Binance CEO
Gareth Jenkinson14 hours agoNigerian officials proposed secret crypto settlement, claims Binance CEOBinance CEO Richard Teng says the Nigerian government has set a dangerous precedent after inviting company executives to
Tools of Humanity delays unlock of 80% of WDL tokens
Ana Paula Pereira8 hours agoTools of Humanity delays unlock of 80% of WDL tokensOriginally set to unlock over three years, the tokens will now become accessible for early contributors and investors over five years, begin
Microsoft AI to make long-term investments in the UK — CEO
Ezra Reguerra1 hour agoMicrosoft AI to make long-term investments in the UK — CEOMicrosoft AI CEO Mustafa Suleyman said the firm plans to make a “significant, long-term investment” in the U.K. as they start hiring
Bitcoin miner Argo repays $35M Galaxy bailout loan
Alex O’Donnell7 hours agoBitcoin miner Argo repays $35M Galaxy bailout loanThe loan saved Argo from bankruptcy during the crypto winter of 2022.1936 Total views7 Total sharesListen to article 0:00NewsOwn this piece of
William Suberg8 hours agoBTC price abruptly dips below $30K as Bitcoin daily candle turns sourBitcoin bulls’ joy does not last long as new yearly highs get swapped out for a trip to new July lows.4118 Total views2 Tota
Societe Generale Forge partners with Bitpanda for euro stablecoin ahead of MiCA
Zoltan Vardai11 hours agoSociete Generale Forge partners with Bitpanda for euro stablecoin ahead of MiCAThe partnership comes shortly ahead of the implementation of the MiCA regulatory framework for crypto service provid
Shelling Out $30K or More in Ethereum — A Look at the Top 5 NFT Floor Prices
Shelling Out $30K or More in Ethereum — A Look at the Top 5 NFT Floor Prices Non-fungible token (NFT) assets have been very popular for well over 12 months and a great number of
Bitcoin price crumbles to $62K support, but derivatives metrics show bullish signs
Marcel Pechman3 hours agoBitcoin price crumbles to $62K support, but derivatives metrics show bullish signsBitcoin’s price continues to correct, but BTC options markets reflect traders’ interest in the $62,000 level.
TikTok parent company explores on-chain possibilities for Web3 gaming and AI
Savannah Fortis11 hours agoTikTok parent company explores on-chain possibilities for Web3 gaming and AIBytePlus is partnering with Mysten Labs to integrate advanced AI algorithms and data warehousing technology into the
Crypto advocates file brief against SEC's investor tracking database
Derek Andersen3 hours agoCrypto advocates file brief against SEC"s investor tracking databaseThe Consolidated Audit Trail would gather a monumental amount of data, and more than it is meant to when it exposes the identit
Iran Shuts Down 1,100 Illegal Bitcoin Miners; Whistleblowers Rewarded $2,400
Iran Shuts Down 1,100 Illegal Bitcoin Miners; Whistleblowers Rewarded $2,400Iran’s Power Generation, Distribution, and Transmission Company (Tavanir) has reportedly shut down