WASHINGTON, March 22, 2018: Wall Street was eviscerated in Thursday trading action. The stock market carnage extended to nearly all stocks on the major exchanges, as traders and investors indulged in an absolute Trade War Freakout. It was the worst trading day since February 8 this year.
Heat map view of the Thursday Trade War Freakout
The FinViz heatmap chart below will give you some idea of just how merciless this tremendous blood bath really was.
Check out all that red. Almost zero major companies were spared. Only a few utilities, a couple of already battered REITs managed to close either flat or in the green. The traditional (if controversial) safe-haven shares of tobacco purveyor Philip Morris (symbol: MO) also emulated St. Patrick in the wearin’ o’ the green. Albeit a few days late.
But that was about it for the positives. The trade war freakout dominated everything else.
More on the market mauling
Three bullet items via Seeking Alpha will give you some idea of today’s vicious market mauling courtesy of the Street’s long pent-up bears.
- The Dow’s back in correction territory, 10% off its all-time high, as it’s sinking into the close and off more than 700 points.
- That’s a 2.9% decline; the S&P 500 is 2.5% lower and Nasdaq off 2.4%.
- More than half the S&P 500 components are also down 10% from 52-week highs today, with General Electric (NYSE:GE) some 56% below its 52-week high.
For more terror, let’s toss the frenzied media horror show narrative over to #AlwaysNeverTrumpResistance CNBC:
“President Donald Trump signed an executive memorandum on Thursday that would impose retaliatory tariffs on up to $60 billion in Chinese imports.
“‘This is the first of many’ trade actions, Trump said as he signed the memo.
“The new measures are designed to penalize China for trade practices that the Trump administration says involve stealing American companies’ intellectual property. They will primarily target certain products in the technology sector where China holds an advantage over the U.S.
“The new measures follow a so-called 301 investigation led by U.S. Trade Representative Robert Lighthizer into China’s potentially unfair trade practices with the U.S.
“Lighthizer’s office will publish a list of targeted products in 15 days, and there will be a 30-day period for public comment, according to senior administration officials…
“The bottom line, said Trump’s trade director, Peter Navarro, on Thursday, is that the U.S. is “strategically defending itself against economic aggression.” The president is standing up for American corporations, he added.
“Lighthizer told lawmakers on Thursday, however, that China is likely to retaliate against the tariffs by targeting U.S. agricultural products that are reliant on the Chinese export market.”
Be afraid. Be very afraid! CNBC’s chamber of horrors-style narrative of President Trump’s tariff announcement was typical of the financial and general media. As in, “We’re all gonna die!” Never let a story like this trade war freakout go.
Scare headline stories pile on the Fear Factor
That’s certainly the way the scare-headline reading high-frequency trading computers read things. Never let a story like this trade war freakout go. After bobbing and weaving in a very nasty but narrow range of roughly minus 350-minus 450 on the Dow, a truly sickening plunge commenced in the final hour of trading.
The increasingly hyper ZeroHedge lobbed in another “scary” bit of Trump reportage Thursday, actually based on late-Wednesday political news. It was icing on the cake for the trade war freakout gang. The President’s chief legal advisor in the increasingly absurd Mueller Russia charade packed his bags. This was due to obvious disagreements with his impatient client.
The truly scary news (for the media mavens) was this item, which notes that Trump appointed a highly respected – and combative – attorney to his team, says ZeroHedge.
“After bringing on former federal prosecutor Joe diGenova on Monday – a former Special Counsel himself who went after both the Teamsters and former NY Governor Elliot Spitzer, Trump is reportedly taking the gloves off according to Vanity Fair‘s Gabriel Sherman.
“Earlier this month, Mueller crossed one of Trump’s stated ‘red lines’ when he subpoenaed Trump Organization business records. According to four Republicans in regular contact with the White House, the move spurred Trump to lose patience with his team of feuding lawyers. ‘Trump hit the roof,’ one source said. Today, Trump’s personal lawyer John Dowd resigned under pressure from Trump.”
Trump fed up with trade imbalances, phony legal issues
Trump hit the roof? Hell, we’d hit the roof over Mueller’s endless extension of subject matter in this sham investigation. It’s dogged the Trump presidency almost since Day One. That’s precisely the intention, of course.
As our TV pitchmen like to say, “But wait! There’s more!”
“diGenova – who said in January that the Obama administration engaged in a ‘brazen plot to exonerate Hillary Clinton’ and ‘frame an incoming president with a false Russian conspiracy,” is married to Victoria Toensing – who, as we’ve mentioned, is a former Reagan Justice Department official and former chief counsel of the Senate Intelligence Committee.
“‘She’s a killer,’ one Republican who knows the couple told Sherman.
“Toensing also happens to represent FBI whistleblower William D. Campbell – who claims to have gathered evidence of a Russian “uranium dominance strategy” which included millions of dollars routed to a Clinton charity. Campbell testified before three Congressional committees in February.”
(Bold text ZeroHedge. Italic text in final paragraph by this writer.)
Later Thursday, reports claimed that Toensing, too, was joining the Trump legal team.
Trump’s gloves-off approach to unfair trade practices and his aggressive move to end Mueller’s investigation to nowhere for once and for all had traders and machines clutching their real or virtual pearls Thursday. And that’s why the entire market got dismembered.
Will Friday trading action provide us with Trade War Freakout 2: The Sequel? Find out tomorrow.