Critical information for the U.S. trading day
Trade-war worries, which have been buzzing around this market like a pesky fly for weeks, may have just gotten an unwelcome jolt of new life.
Stocks, having recovered from the initial shock of the White House’s steel tariff move, got rattled again late yesterday on talk of new, wider levies on Chinese goods. Strategists think it will take a full-blown trade war to take this market down … and our call of the day from the Wolf Street blog’s Wolf Richter says we should watch out.
“If this is true … then it’s going to add a lot of fuel to the already heated trade dispute between the U.S. and China, and may ultimately make the steel and aluminum tariffs look like a game,” he writes.
Speculation over China tariffs surfaced last week, but the latest chatter adds some detail — up to $60 billion in tariffs could be imposed on tech products and imports such clothing. This comes after the Trump administration squashed a buyout of chip group Qualcomm QCOM, +0.34% by Broadcom AVGO, +0.67% on worries about China telecoms giant Huawei.
“Concerns about the possibility of a trade war and concerns about the shutting down of one tech deal may be a precursor for others, and that may imply lower valuations for technology companies,” Edward Koen, portfolio manager at QMA, told CNBC.
As for where a China tariff could hit hard, Boeing BA, +0.25% , Apple AAPL, +0.29% , Micron MU, +0.37% Nvidia NVDA, +0.44% . Walmart WMT, +0.45% and NikeNKE, -0.97% have been mentioned here and there as in line to take a hit. Boeing and Apple each fell yesterday.
“We’re not talking about fancy cashmere sweaters, we’re talking about cotton T-shirts and jeans and shoes that kids wear for back-to-school,” Hun Quach, a trade lobbyist for the Retail Industry Leaders Association tells Reuters of potentially higher tariffs on China.
“Alarm bells are ringing,” she says.
Key market gauges
Dow YMM8, +0.44% S&P 500 ESM8, +0.32% and Nasdaq NQM8, +0.42% futures are holding gains after retails sales fell short of forecasts.. Banking and tech stocks dragged Asian stocks south. In Europe, SXXP, +0.39% shares got a bump from comments by ECB President Mario Draghi, who spoke about stepping up bond buys.
Check out Market Snapshot for more on today’s action.
Walmart WMT, +0.45% wants to take on Kroger KR, +0.08% and AmazonAMZN, +0.49% when it comes to home-grocery delivery. The retailer plans to roll out deliveries in 100 cities by the end of the year.
Retail sales fell a third-straight month and producer prices pushed higher. Business inventories are due at 10 a.m. Eastern.
Mott Capital founder Michael Kramer wonders whether techs are starting to get overextended, noting some analysts seem to be trying to find fresh ways to support price-target revisions. He points to Nvidia, which got a $300 price target from Jefferies earlier this week, on the rationale that a new Steven Spielberg movie could be a catalyst for VR headsets.
Producers of Netflix’s NFLX, +0.67% hit series “The Crown” are taking some flak after revelations the actress who plays Queen Elizabeth II is paid less than her on-screen husband. That will apparently be rectified going forward.
Bitcoin BTCUSD, -4.53% got rattled after Alphabet’s GOOGL, +0.47% Google signaled in an update to its ad T&Cs that it plans to ban online ads for cryptocurrencies and ICOs in June. That comes as Google said it had blacklisted nearly 90,000 websites and 700,000 mobile apps for breaking its ad rules.
Credit Suisse has rolled out its Global Investment Returns Yearbook for 2018. Among its findings, it appears equities have remained on top for decades, when it comes to returns.
“Since 1900, global equities have beaten bonds and bills, outperforming cash (Treasury bills) by 4.3% and bonds by 3.2% a year — a reward for the higher risk associated with investing in stocks,” say the authors of the yearbook, put together by the Credit Suisse Research Institute and London Business School professors.
“Remembering Stephen Hawking, a renowned physicist and ambassador of science. His theories unlocked a universe of possibilities that we & the world are exploring. May you keep flying like superman in microgravity, as you said to astronauts on @Space_Station in 2014.” — That was NASA tweeting a tribute to the renowned and beloved British scientist who died early Wednesday at the age of 76.
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