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Tariff Wars ?

Discussion in 'Politics Discussion' started by Judge, Mar 22, 2018.

  1. Judge

    Judge Well-Known Member V.I.P Member

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    Looks like Wall Street and not China just fired the first shot of a tariff war at Donald Trump. And your 401k just took one ugly hit in the crossfire.

    The DOW just closed today dropping 724 points. Mostly in reaction to imminent tariffs being implemented. But then while the economy itself remains healthy, the stock market has been overbought since last summer. Then factor in the Federal Reserve absolutely committed to increases in interest rates. And inflation is something to keep a close eye on. And Facebook's data scandal to consider as well.

    Something had to give on a bull market which cannot last indefinitely.

    Tough thing to happen on a Thursday. Hard to predict what tomorrow has in store. <wince> :eek:
     
  2. Fridgemagnetman

    Fridgemagnetman I only have one V.I.P Member

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    Dow 20k.....
     
  3. Judge

    Judge Well-Known Member V.I.P Member

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    Let's hope not. That's a threshold where recession might come into play if corporate tax reductions aren't factored into the equation in the coming quarters. I'd settle for a floor of 22k.

    But who knows where this could all go, especially if Trump sticks to his tariff plans?
     
  4. Mia

    Mia Well-Known Member V.I.P Member

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    You know he'll backpedal, he did so on negotiations with Canada and Mexico. If he sticks with them, all the major players like Walmart will not be able to sustain themselves. It's not the middle class who will suffer, it's the working class.

    With China's ownership of U.S. debt -- $1.189 trillion as of October 2017. Although the federal reserve owns double that. It makes no sense that Trump would consider tariffs. The Chinese buy up dollar bills in the form of treasuries. This helps inflate the value of the dollar. In return, American consumers get cheap chinese products and incoming investment capital.
     
    Last edited: Mar 22, 2018
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  5. Fridgemagnetman

    Fridgemagnetman I only have one V.I.P Member

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    Small players..... sell it goes down to 19500.
    Big players buy... back to 22000, small players buy.

    I'm thinking this is one of the real first signs,
    (And for example a depreciating dollar with rising rates)

    of America losing its hegemony.

    Trumps comments are an example of claiming credit for shutting the stable door after the horse has bolted.

    Slow process.. very long term trend beyond our lifetimes likely but a more unstable world is very possible.

    But lets hope not.
     
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  6. Judge

    Judge Well-Known Member V.I.P Member

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    Apparently so. Just look at how steel producer Nucor's stock dropped 6.52% today alone. Clear evidence that proposed tariffs for steel are creating more problems than solutions. More equity lost than gained before the tariffs were even implemented.

    But with so many "yes men" being ushered in, it's difficult to predict if anyone is willing to tell this emperor that he's not wearing any clothes.
     
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  7. Fridgemagnetman

    Fridgemagnetman I only have one V.I.P Member

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    But is the tariffs a way to add to inflation?
    Plus wage inflation... what problem does that solve?
     
  8. Judge

    Judge Well-Known Member V.I.P Member

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    US Steel lost even more today in shareholder equity. Nearly 11% just disappeared from their bottom line and it's only Thursday. At this rate they're both more likely to go out of business than have the effective capital to revitalize foundries over time to domestically produce their own steel from scratch than import it.

    That 13% corporate tax reduction Trump implemented is getting swallowed almost whole given such rapid losses in equity. And I don't see those same investors going back into steel any time soon. So much for those 15 electoral votes in North Carolina and the even more critical 20 electoral votes in Pennsylvania.

    Seems like one helluva a gamble where time isn't necessarily on their side. Some serious miscalculations going on at 1600 Pennsylvania Avenue. To the point where they may eventually have to backtrack not just to save their political face, but save the economy if Wall Street slips too far south.

    And with another election cycle on the way this year.

    Tomorrow's market results may be quite critical in determining whether investors are just cautiously pulling back or driven by more ominous panic sales.
     
    Last edited: Mar 22, 2018
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  9. LucyPurrs

    LucyPurrs NT, INFJ V.I.P Member

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    Dang, you'll are scaring me. I haven't a clue about this stuff but know I can't afford to lose any money that's invested, have too little as it is.
     
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  10. Judge

    Judge Well-Known Member V.I.P Member

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    I eliminated my exposure to the stock market a few months ago. I live by the fundamentals and they all reflect that this bull market cannot last indefinitely. Worse when the market is so thoroughly overbought. But then optimists still think this wild ride isn't over. We shall see...
     
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  11. LucyPurrs

    LucyPurrs NT, INFJ V.I.P Member

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    My investments are very conservative and I requested they not be in the stock market so hope I'm safe but will call my financial adviser tomorrow!
     
  12. Judge

    Judge Well-Known Member V.I.P Member

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    That's good, especially if it involved utilities which didn't take the kind of hits that technology and finance did. Utilities being far more conservative investments in the long haul.

    This is a good time to be top-heavy in more conservative equities because they may well go up with an avalanche of investors moving their more riskier holdings to more stable ones if it's widely perceived that the market is truly shifting.

    Individual investors are likely to "get out of Dodge" while long term fund managers are more prone to repositioning their assets to "higher ground". Those folks who handle our 401ks.
     
    Last edited: Mar 22, 2018
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  13. LucyPurrs

    LucyPurrs NT, INFJ V.I.P Member

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    Thanks Judge :)
     
  14. Fridgemagnetman

    Fridgemagnetman I only have one V.I.P Member

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    Asset allocation
     
  15. Judge

    Judge Well-Known Member V.I.P Member

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    Sector Price Trends for March 22:

    Financials -3.7%
    Information Technology -2.7%
    Consumer Discretionary -2.1%
    Industrials -3.3%
    Telecommunications -1.4%
    Health Care -2.9%
    Materials -3.0%
    Real Estate -0.4%
    Energy -2.0%
    Consumer Staples -0.8%
    Utilities +0.4%

    Here are the biggest Dow and S&P 500 stock losers in March
     
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  16. LucyPurrs

    LucyPurrs NT, INFJ V.I.P Member

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    ? -sorry I'm so thick :(
     
  17. abby normal

    abby normal Well-Known Member

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    ^^^LucyPurrs, I am in the same boat. I can't afford to leave the market, that is where my income comes from [dividends]. i'm stuck there. the small investors like me are the grass, and the GOP elephant is on a tear, and it's the grass which suffers at those times.
     
  18. Judge

    Judge Well-Known Member V.I.P Member

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    No panic selling today. Markets fluctuating in both positive and negative territory for the day. At least we have that much. Though the market on the whole still remains overbought, and the specter of retaliatory tariffs remains a very real possibility short of the administration backing off on proposed tariffs.

    In the meantime the probability of continued volatility remains relatively high. With fewer and fewer influential players controlling the market for better or worse. Not a good place to be at the moment, IMO.

    At least the president signed the spending bill, so that should keep volatility down at least into the next week...maybe. I think we've all had enough financial excitement for this week.

    Seems in less than two hours the market turned on itself again. Not good, with the Dow falling another 425 points. Not looking good. Low volume trading south with banks and high tech taking some real hits again.
     
    Last edited: Mar 23, 2018
  19. abby normal

    abby normal Well-Known Member

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    I wish the market would just get its major correction over with so I won't have to worry about it anymore.
     
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  20. Judge

    Judge Well-Known Member V.I.P Member

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    Some at CNBC are now calling this as the "correction". But yeah, who knows if it really is. Monday should be interesting.

    Kind of scary to see how this all panned out considering investors seemed to be buying on the dip early this morning. Very difficult to "read" this market.

    And mega-hawkish John Bolton becoming National Security Advisor won't help the volatility index. Might be nice if we don't hear a peep from the administration at least for the next week....and let the market focus on metrics rather than political headlines. But there's a lot of ugly talk coming from China now. And I wouldn't expect their ire and rhetoric to suddenly stop anytime soon.
     
    Last edited: Mar 23, 2018