WASHINGTON. Leave it to the media to emphasize the short-term negatives resulting from what they’re calling President Trump’s “trade war” against the universe. Monday’s overhyped reportage has caused predictable Slaughter on Wall Street due to today’s frantic and negative trading action.
This report from CNBC cites a piece from the Wall Street Journal as “evidence” for today’s market carnage.
“The Wall Street Journal reported Sunday that President Donald Trump plans to bar several Chinese companies from making investments in U.S. tech. The newspaper also reported that the administration wants to block additional technology exports to China. Both measures are expected to be announced by the end of the week.”
So, as a result of speculation based on this story, the entire stock market decided to take a header at Monday morning’s opening bell. The Dow Jones Industrials almost immediately dove some 450 points to the negative.
Treasury Secretary Steve Mnuchin gamely tried to blunt the effect of the WSJ story with a calmly informational tweet.
On behalf of @realDonaldTrump, the stories on investment restrictions in Bloomberg & WSJ are false, fake news. The leaker either doesn’t exist or know the subject very well. Statement will be out not specific to China, but to all countries that are trying to steal our technology.
— Steven Mnuchin (@stevenmnuchin1) June 25, 2018
Unfortunately, the well-meaning Mnuchin simply ended up dropping another bomb.
After he posted his tweet, the market recovered about 100 Dow points to hover in the mid-300 point zone on the negative side of the ledger. But then, Wall Street policy wonks read that tweet again. They noted that the rumored Trump technology export ban against China was actually a potentially much larger ban, according to Mnuchin. That’s because it would affect all our trading partners, more or less. The reason for this is simple. All our trading partners are ripping off America’s technological advances to some extent or another. Not just China.
Ooops, instant mayhem. The Slaughter on Wall Street began anew. Once Streeters figured this out, the Dow and the other major averages – particularly the tech-heavy NASDAQ – began to plummet again.
As we write this half an hour before the market close, the Dow is again off around 425-450, about a 1.75 percent hit. The S&P 500 is down 48.19 points for another 1.75 percent decline. And traders took the NASDAQ out back and shot it, given the tech-centric nature of today’s rumor mill. It’s currently off a whopping 193.40 points for an over-2.52 percent beating.
The WSJ, to which I subscribe, remains relatively even-handed when it comes to politics. But the news section has predictably been morphing more anti-Trump since the paper gave their relatively neutral Editor-in-Chief the boot earlier this month.
Too bad more WSJ reporters are joining the anti-Trump party. This makes it harder and harder to analyze what’s really bubbling under the surface of the current, confusing market. It would be helpful if someone just reported the simple truth when it comes to business.
Trump is attempting to turn around an increasingly negative international trade situation. It’s persisted for decades, this Slaughter on Wall Street. And the perps include not only China but also our alleged friends and trading partners. For years, all the above have been gouging muscle and bone out of America’s innovative companies and technologies. No more, says Donald Trump.
Trump’s using tariffs as a bargaining tool to halt this routine screwing of American business. That’s doubly true for tech, something noted by Peter Boockvar, “chief investment officer at Bleakley Advisory Group,” whose cited in the CNBC report on the original WSJ article.
“[Boockvar] said in a note there are three goals the administration wants to complete with these tariffs: to protect tech companies from Chinese theft, to lower trade barriers set by other countries relative to the U.S. and lower the trade deficit.
“‘As for the first concern, we don’t seem to have made any progress addressing with the current tariff plan but are at least calling China out deservingly so. The 2nd one might be gaining some traction in bits and pieces and hopefully continues. The 3rd is only a symptom of everything else,’ he said. ‘Either way, and regardless of how one thinks this should all be handled, the means to the intended end is immediately having negative real world impacts.’”
Both the media and America’s hardcore, anti-Trump leftists continue to hammer Trump mercilessly for long-overdue actions that could really help out a majority of American workers if implemented and followed through. It seems they’d rather establish permanent, unilateral control over the Federal government and resume the journey on Barack Obama’s Marxist road to ruin. After all, who loves a Deplorable voter anyway?
As we wrap this piece, stocks are trying for a second time today to recover at least some of their losses. As of 3:40 p.m. ET, the Dow has once again recovered roughly 100 points. It currently stands at 320.80, losing some 320 points (off 1.32 percent).
Slaughter on Wall Street: The Monday edition
Only God knows where the market will close on a day like today. But as long as difficult tariff and trade negotiations persist, and as long as our trading partners don’t get the message that the U.S. under Trump demands a fairer deal worldwide, these violent, manic-depressive, largely headline-driven markets will persist.
That makes it tough for most small traders and investors to get a better-than average annualized return. You just never know anymore when the stocks you hold will get hit by the anti-Trump rumor mill. So you never know when your portfolio will get hammered by the latest capricious Slaughter on Wall Street scenario.
It’s an increasing problem for all of us. And it’s one that continues to drive this writer into larger positions in select ETFs. It’s one way, at least, to cut some of this truly awful current volatility that’s persisted in U.S. markets since later winter, 2018.
—Headline illustration: Cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection.