Just as predicted - Usd/Cad now on the move in past hour - more tariffs on aluminium/steel announced by Pres Trump
Confirms that he is def not market watching.
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And now Usd/Cad is back to where it kicked off - why?
Because Pres Trump has commented that he will probably cancel the 50% & revert to 25% - or some other decision.
TA out the window in these circumstances - stocks blipped up on the comments - maybe he is market watching after all.
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Those plans took a leap fwd today - 513 for 207 against
Expected to pass next stage on Friday coming
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While Trump is endorsing Elon Tesla vehicles on the White House lawn, lol, we are experiencing real market movement.
Tesla short sellers land a $16.2bn payday on stock plunge as rival BYD hits record high on world’s fastest EV recharging tech.
Short sellers betting on Tesla decline have now pocketed $16 billion
- BYD hit a record-high market cap of nearly $160 billion thanks to its latest innovation, while a steep drop in the share price of Elon Musk’s carmaker has lined the pockets of Tesla bears. Musk’s politics appear to be hurting his business, since “it’s not people with cowboy boots who buy Teslas.”
Tesla bulls have it hard right now. After suffering an unprecedented plunge in the stock price that has enriched short sellers to the tune of $16 billion, arch-rival BYD just celebrated an all-time high.
Shares in the Chinese EV manufacturer hit a record after it unveiled two new models from its Dynasty family: the five-meter-long Han L executive sedan and the Tang L SUV, vehicles that are capable of recharging just as fast as refueling a conventional combustion engine car.
While the Chinese manufacturer is investing further in EV innovation, Elon Musk’s carmaker has chosen a strategic pivot towards the development of humanoid robots, which he believes will vault it to become the world’s most valuable company.
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And so the tariff war begins - very likely risk off for the market, Euro negative.
How long will it last? - as long as a piece of string is the short answer.
Will it achieve it aims? - depends on what those aims actually are - Jan 2018 tariffs with China didnt decrease the US/China deficit, it has actually increased since then.
How to gauge the market effect overall is difficult, retaliatory tariffs and then retaliatory to the retaliatory appears to be on the horizon - good chance investors will exit stocks for now.
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Nearly half of all cars sold in the U.S. last year were imported, research firm GlobalData says.
In response to the news, shares of General Motors slumped 8% in after-market trading. Shares in Ford and U.S.-traded shares of Chrysler-parent Stellantis fell about 4.5% each.
In Asia, shares in Toyota Motor, Honda Motor and Hyundai Motor all fell between 3% and 4%.
Shares in Tesla, which makes all the cars sold in the United States locally but with some imported parts, were down 1.3%.
Trump said the duties announced on Wednesday could be a net neutral or even good for Tesla, adding that its CEO, and his close ally, Elon Musk, did not advise him regarding auto tariffs.
On Wednesday, Trump reiterated that he expected the auto tariffs to prompt automakers to boost investment in the United States, instead of Canada or Mexico.
Autos Drive America, a group representing major foreign automakers such as Honda, Hyundai, Toyota and Volkswagen, said the “tariffs imposed today will make it more expensive to produce and sell cars in the United States, ultimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the U.S.”
Auto mfctrs will continue to look to China - incl Tesla who have production facilities there.
Xi has launched a charm offensive beginning this morning with a meeting of world CEO’s incl BMW & Mercedes. His message is one of stability, "safe investment destination’ for foreign companies.
One phrase being quoted as from Xi “blowing out other people’s lights will not make your own light brighter” - similar to the quote he made at the closing of BRICS 2 years back.
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We all know that current affairs have had an effect on the market right now - that’s the FA version.
So what about TA - usually when the ‘news’ is current the effect is most evident on hr1, but the market is in new territory - better to view in d1 - the focus as always is on what is likely up ahead.
This new territory is more difficult to navigate, it changes from day to day, hr to hr.
2 daily charts worth looking at as the close of the day/week beckons - see where price has reached down to - in the week ahead keep an eye on these levels - they may well determine possible future current affairs.
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The UK apparently are the least affected by current affairs - a rate of only 10%
Not what UK100 is saying right now - d1 close for the day/week
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The above selling was mostly fuelled by China’s announcement of 34%
Meanwhile we await the EU response.
There is a meeting on Mon between EU’s trade ministers in Luxenbourg. This is how the EU will respond - input from member states,each with their own angle.
Approval for the retaliation re the steel and aluminium tariffs will happen on Wednesday.
Meantime a package is being drawn re the 20% tarrif announced this week - discussions are being kept under wraps.
There is a train of thought within the EU that the 20% number will push many EU companies out of the US market thus if the US responds by raising the 20% number the impact will be minimal.
My own thinking (for what it’s worth) is that the Commission will adopt a incremental approach - specific tarrifs on specific trade - they can include services etc at a later time if negotiations fail.
Very unlikely that the Anti-Coercion Instrument law will be used at this time.
It’s a case of watch this space I suppose.
Edit: Wednesday’s approval of the retaliatory measures relate only to the earlier Steel tariffs announced by the US - these measures will come into effect on 15th April…
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There you go, a month later, forget FA or TA - just follow Pres Trump’s latest words - and that is no easy task.
from an investors pov the simple thing is to wind out of stocks when they recover some from the current debacle - there is without doubt a lot of risk on/off up ahead and fomc minutes, numbers etc have little meaning, just like the technicals.
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Question is why now?
Who was behind the selling - investors in general or a specific large US bond holder such as a State actor?
Bottom line is that when yields rise so the cost of the extremely large US debt equally rises - soon feeds through to mortgages, loans, HP & economy.
Signs first raised yesterday UK evening $58bn 3yr notes auctioned at 3.784%
No politician can fight the bond market, last one I remember was UK PM Liz Truss who tried & failed.
Anyways check out the 30Yr price, ignore the rebound in the last few hours - writing on the chart what was about to happen.
Edit: meant to mention - check out a “Bond Vigilante” & James Carville’s famous quote
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That notion of following talking heads and risk on/off now extends Fox Business.
A bounce in US stocks is being attributed to that channel’s Charlie Gasparino latest tweet.
Bottom line - watch the bond market - that’s what dictates sentiment for the US because that’s what is funding it’s very large debt - simple.
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Finally as the week closes the talking heads continue - Reuters reporting 2 hrs back
" U.S. President Donald Trump is optimistic about reaching a trade deal with China, White House press secretary Karoline Leavitt said on Friday"
So the question that springs to mind - risk on took a bounce this evening following both the Fox News article and the Karoline Leavitt comments - is it all FA, or do the techs have any input?
Remember that in Bonds the higher price equals lower cost - and this thing about dbl bottoms in TA.
FA/TA /S&P/talking heads - all one market - how to view it - risk vs reward.
The market is short term right now - US 30 price below is hr1
(price up = cost down.)
