China Is Not Backing Down , And Why Should They?
A confluence of market ruinous variables has triggered the intersection of short, medium and long-term investors who are taking for the sideline for fear of a market trainwreck.
US equity markets tumbled overnight as investors headed for the relative safety of Bonds as the US is on the cusp of a full-blown trade war with China. And with China unlikely to back down and to readying the retaliatory tariff salvos, markets are looking immensely fragile today. Strap in as a tit for tat tariff tiff is about to start.
Fortunately for the US, however, US bond markets remain the only game in the town for China, and while the may use pulling out of US bond markets as a lever in the trade war, it’s implausible they will follow through for fear of irreparably eroding the values of their enormous US holdings.
But the global economy is also looking incredibly more brittle this morning in the wake of the disappointing Eurozone, German and France PMIs, so this data also explains some of the market jitters.
Trump’s revolving door remains in full swing as John Dowd, Donald Trump’s lead lawyer and ‘strongman’in the Mueller investigation into Russian election interference handed in his walking papers after the President is purportedly turning to Fox news for legal advice. The president’s erratic nature continues to generate credibility issues. But it doesn’t stop there as General McMaster was also handed his marching orders today.The Facebook data controversy is showing few signs of abating and continues to have far-reaching implication not only for the social network but the tech sector in general. All this has translated into a massive risk-off correction with steep falls in global equity markets and broader USD strength as investors head for the safety of US bonds. Finally, the storm called ‘Daniels ‘is expected to hit landfall on Sunday night. CBS has announced they will air a telltale highlighting Porn Star ‘Stormy Daniels ‘infidelities with President Trump. While probably more tabloid fodder than anything else, nasty sex scandals have had a negative influence on past presidents approval ratings. But given GOP strongholds in the Bible Belt, these revelations could be particularly damaging to the GOP.