Testy trade poker is now bending a bit to suggest Europe as honorable contrasted to the U.S., only because of Trump’s heavy response to the EU’s proposal for tariff elimination on all autos as well as industrial products, writes our roving Trader Gene Inger from Berlin.
His redaction of cooperation is the antithesis of his own proposal for 100% tariff elimination. A discussion today with Tesla (TSLA) staff here in Germany affirms hopes for solid Model 3 sales, especially if Trump re-embraces the idea of a 100% industrial product tariff avoidance.
Reuters: Wall Street slides Tuesday on tech weakness, Nike drags on Dow.
Trump’s tweet on trade contrasted the EU with China, but smaller.
This is ridiculous, since currency and wage parities are closer among both. It’s hopefully a negotiating ploy. The market didn’t like it and I realize why. It is slightly different with Canada. and we don’t seriously accept Trump very pointedly saying we might not have Canada in a revised NATO.
A spread in currencies, not low undermining wages, is the underpinning challenge.
At the same time the market is sorely due to correct from a prolonged and uninspiring grind higher along the standard deviation envelop highs. I believe any drop now, while valid, will be contested this week after Labor Day, because they’ll view any selling as mere pre-holiday squaring, not as a correction. So again, it will be a process if it proceeds, not an event.
Ultimately, we should get a more aggressive highly visible correction that takes out some of the high level technical supports, just not quite at this point.
Guys like Warren Buffet are basically talking the market up or at least trying to psychologically preempt selling, by suggesting that stocks of course do better than bonds for the long term. This is true. But inferring it at an extended level like we’ve visited is more a form of hand-holding or of cheerleading for stocks in general, than it is analysis of where we are.
