On the heels of yesterday’s rout in stocks, one pro just warned, “There is a lot of collateral damage.”
A Lot Of Collateral Damage
November 27 (King World News) – Here is what Peter Boockvar wrote today as the world awaits the next round of monetary madness: If nothing productive comes of the Trump Xi meeting at weeks end, I think it’s fair to say that US tariffs on Chinese goods and the threat of more was not the effective tool its been made out to be in facilitating a trade deal out of the Chinese that would protect US technology most importantly (lowering our trade deficit with them is a nonsense goal). In other words, it would have failed in its stated purpose as a tactic. Double down again or try something new?…
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Instead, it’s slowed down global trade, pissed off a multitude of trading partners, disrupted global supply chains (a stated purpose I guess), raised the cost of doing business and has frozen capital spending plans. There is a lot of collateral damage and innocent bystanders in the US that get hurt.
As for my first paragraph, I hope I’m wrong and we at least get a time out at weeks end. If the case, then with the 2nd, hopefully that can quickly reverse.
Meanwhile In China
There was no response in Chinese stocks to the latest threat as both the Shanghai comp and H share index in Hong Kong were unchanged. The offshore yuan is up slightly. Copper though is down for the 5th day in the past 6.
Trouble In France
… What’s likely the result of the fuel tax hike induced protests in, French consumer confidence in November fell to 92 from 95 and that was 2 its less than expected. That is also the lowest since January 2015. The ‘Standard of Living’ component saw particular weakness. Outside of this fuel tax, I do believe PM Macron has been doing many of the right things to turn this sclerotic welfare state of an economy into a more liberalized economic construct.
French Consumer Confidence Plunging
Consumer confidence has plateaued in Italy as this index has basically flat lined over the past year and topped out in November 2015 in this cycle. Manufacturing confidence did moderate by .5 pt to the lowest since December 2016. Overall economic sentiment also dropped to the weakest since December 2016. Italy of course is in the grips of a budget fight and the cost of capital has skyrocketed this year relative to where its been. This data is never market moving and Italian yields are down slightly on hopes of a deal with the EU while the MIB stock index is giving up about .25% after yesterday’s 2.8% bounce.
Lastly in Europe, the UK CBI retail sales index improved to 19 from 5 and that was about double the estimate. CBI though didn’t sound very optimistic, “While it is encouraging to see headline retail sales growth strengthen in November after a weak out turn in October, the quarterly survey continues to paint a gloomy picture of the sector. Business sentiment remains poor, investment intentions are flat, and headcount continues to decline.”
Any Brexit Deal Will Do
At this point, any Brexit deal is better than no deal for many Brits as Brexit fatigue has certainly set in. That said, the pound is weaker vs the dollar and breaking back below $1.28 because the Democratic Unionist Party in Belfast, a group that has supported May, is against the current deal. May needs their support if this deal is going to have any chance of passing thru Parliament.
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ALSO JUST RELEASED: HISTORIC TRADING CONTINUES: Commercials Making Moves In The Gold & Silver Markets CLICK HERE TO READ.