Reuters: Wall Street stresses over White House comments

Sho_Nuff82 · Dec 6, 2018

https://www.reuters.com/article/us-usa-trump-markets-analysis-idUSKBN1O51EA

On Tuesday, major stock indexes plummeted more than 3 percent on renewed fears of a trade war with China — just days after Trump tweeted, following a steak dinner with Chinese President Xi Jinping, that "Relations with China have taken a BIG leap forward!"
"It doesn't seem like anything was actually agreed to at the dinner," JPMorgan wrote in a note to clients later that day, adding that Trump's tweets "seem if not completely fabricated then grossly exaggerated."

"It's a judgment call about which announcements should be taken seriously," said Maria Vassalou, portfolio manager for Perella Weinberg Partners' $685 million global macro strategy.
"This situation certainly creates unnecessary volatility and complications to the investment process."

Daniel Lowen, chairman of Quantedge Capital USA Inc, said his approximately $1.5 billion hedge fund firm's algorithms do not try to anticipate market movements from Trump administration pronouncements. "We make no attempt to interpret what we read in the news as input to our investment decisions," Lowen said.

More in the link, including several funds who have incorporated the new volatility into their investment strategy. It would seem that the financial markets have come around to the reality that the emperor does not, in fact, have clothes on.

BWoog · Dec 6, 2018

It's amazing that the market didn't immediately crash when Trump started implementing the tariffs themselves to be honest. They barely budged.

Hollywood Duo · Dec 6, 2018

I remember my dad being convinced China would cave on the tariffs. I was like why are you so sure about that pops.

marrec · Dec 6, 2018

And now Trump has arrested Huawei's CFO...

rhydon321 · Dec 6, 2018

Trump's tweets "seem if not completely fabricated then grossly exaggerated."

JJDubz · Dec 6, 2018

Kmonk · Dec 6, 2018

marrec said:
And now Trump has arrested Huawei's CFO...

What are the specific implications of this? I saw the headline this morning and thought "that can't be good..."

But I don't have a real understanding of how this plays into the ongoing trade negotiations.

Pockets · Dec 6, 2018

BWoog said:
It's amazing that the market didn't immediately crash when Trump started implementing the tariffs themselves to be honest. They barely budged.

The forces don't want a crash, but the market has been rudderless for the entire year.

Corporations have been making money hand over fist, but also have a dipshit captain at the wheel.

Razgriz417 · Dec 6, 2018

Kmonk said:
What are the specific implications of this? I saw the headline this morning and thought "that can't be good..."

But I don't have a real understanding of how this plays into the ongoing trade negotiations.

https://www.cnn.com/2018/12/06/investing/stock-markets-huawei-arrest/index.html

Here you go, I'm sure the Chinese gov won't take kindly to US attacks on their businesses

and now this:
China is demanding the release of telecoms giant Huawei's chief financial officer, who has been detained in Canada.
https://www.bbc.com/news/business-46465768

According to the BBC article the CFO is the "princess" of the Chinese tech industry

Inugami · Dec 6, 2018

BWoog said:
It's amazing that the market didn't immediately crash when Trump started implementing the tariffs themselves to be honest. They barely budged.

Because people (IE stock holders) are convinced that a republican in the white house is good for them and don't react over the little things because "there is no way this will continue" and "he won't really go through with a trade war."

Which is what everyone thought of Trump the first couple months.

Wilsongt · Dec 6, 2018

It's almost as if Trump's stupid-ass tweets and lack of knowledge about anything has real world consequences.

But, I will wait to form an opinion until the NYT publishes an article about how Trump supporters in a diner in rural Arkansas feel about this Dow falling.

Window · Dec 6, 2018

It's not just the tariffs but Trump's entire style of governance which is based on misinformation, large volume of low value statements and rash decisions. This creates uncertainty and markets dislike uncertainty. There is no plan or strategy at the WH right now. Markets react to short statements from people in positions of power (like the Fed chair). Obama tried to convey this to Trump but to him words have no meaning.

thefit · Dec 6, 2018

Kmonk said:
What are the specific implications of this? I saw the headline this morning and thought "that can't be good..."

But I don't have a real understanding of how this plays into the ongoing trade negotiations.

He's Chinese wich like in any authoritarian country it means he has the backing of the country and so a prominent member and extension of the government and it happened a few days after a cooling in tariffs rhetoric. Trumps reaction here will be telling. Did he even know they where arresting him? Does he care since they violated Iran sanctions laws? Is he going to ratchet up tariffs talk again or appease Xi and look like compromised dope again since his kids rely on Chinese pattents for their junk?

Slayven · Dec 6, 2018

Thats their boy, now they have buyer's remorse

marrec · Dec 6, 2018

thefit said:
He's Chinese wich like in any authoritarian country it means he has the backing of the country and so a prominent member and extension of the government and it happened a few days after a cooling in tariffs rhetoric. Trumps reaction here will be telling. Did he even know they where arresting him? Does he care since they violated Iran sanctions laws? Is he going to ratchet up tariffs talk again or appease Xi and look like compromised dope again since his kids rely on Chinese pattents for their junk?

She.

She's the daughter of a very important man in China and has been a very public face of China's tech sector for years now.

It'd be a little like China arresting Sheryl Sandberg.

Slayven · Dec 6, 2018

marrec said:
She.

She's the daughter of a very important man in China and has been a very public face of China's tech sector for years now.

It'd be a little like China arresting Sheryl Sandberg.

*googles* funny you should mention her and her being in the new lately

RoKKeR · Dec 6, 2018

Another very red day.

marrec · Dec 6, 2018

Slayven said:
*googles* funny you should mention her and her being in the new lately

I'm sure Wanzhou Meng has done plenty of opposition research for the Chinese government so the parallels are juicy lol

mutantmagnet · Dec 6, 2018

Pockets said:
The forces don't want a crash, but the market has been rudderless for the entire year.

Corporations have been making money hand over fist, but also have a dipshit captain at the wheel.

So Trump is the captain of the Titanic.

Slayven · Dec 6, 2018

marrec said:
I'm sure Wanzhou Meng has done plenty of opposition research for the Chinese government so the parallels are juicy lol

Difference being Chinese can actually disappear people, and still do.

shnurgleton · Dec 6, 2018

yeah probably wanna steer clear of referring to something as a great "leap forward" when you're talking about China

ahoyhoy · Dec 6, 2018

shnurgleton said:
yeah probably wanna steer clear of referring to something as a great "leap forward" when you're talking about China

First thing I noticed in the OP too.

It's Trump though. He wouldn't have even a spark of recognition if asked if there was a problem witb his statement.

AHK-Hero · Dec 6, 2018

I wonder what will come of this momentary cease-fire.

Sho_Nuff82 said:
"It doesn't seem like anything was actually agreed to at the dinner," JPMorgan wrote in a note to clients later that day, adding that Trump's tweets "seem if not completely fabricated then grossly exaggerated." .

I lol'd.

amoy · Dec 6, 2018

mutantmagnet said:
So Trump is the captain of the Titanic.

More like the captain of Costa Concordia.

I Don't Like · Dec 6, 2018

JJDubz said:

He's not lying though - he honestly believe the shit he says.

So it's more like, "You really think Trump would do that, just go on Twitter and talk out of his ass?"

Strike · Dec 6, 2018

They never learn. They fuck up, we shouldn't bail them out this time.

Soap · Dec 6, 2018

Market to Trump: Shh don't blow our cover. Let us go wild with your deregulated markets and then blame the next bunch.

Helot_Azure · Dec 6, 2018

We're heading for another crash arent we?

Ushiromiya · Dec 6, 2018

How much of the volatility is actually due to tariffs and not just the usual hissy fit over fed policy?

TheSaddestSort · Dec 7, 2018

Now you idiots are concerned? Where have you been the past year? I say all of that and then realize that these are probably the same corporations and CEOs that are going to be lining up in D.C. for a government bailout the moment the recession finally hits.

S-Wind · Dec 7, 2018

KojiKnight said:
Because people (IE stock holders) are convinced that a republican in the white house is good for them and don't react over the little things because "there is no way this will continue" and "he won't really go through with a trade war."

Which is what everyone thought of Trump the first couple months.

There's a part of me that wants the markets to crash REALLY HARD so that people MIGHT finally wake up the the reality that a right wing politician in power does not guarantee economic prosperity - it's usually the opposite.

But then I, along with a lot of other people I care about would also get fucked over....

Sho_Nuff82 · Dec 7, 2018

Ushiromiya said:
How much of the volatility is actually due to tariffs and not just the usual hissy fit over fed policy?

Stock market is based on speculation, president tweets out "soy is coming back in a big way CONFIRMED", some guy loses his life savings when he discovers this is not the case 48 hours later.

The big firms are telling people to ignore Trump's comments because half are outright lies and the other half have no definitive timeline. It's simply not a good basis for a stable investment strategy.

Thorn · Dec 7, 2018

How long until Wallstreet gets sick of Trump's shit as well?

They might actually have some leeway.

Ushiromiya · Dec 7, 2018

Sho_Nuff82 said:
The big firms are telling people to ignore Trump's comments because half are outright lies and the other half have no definitive timeline. It's simply not a good basis for a stable investment strategy.

Yeah that's my point. Trump campaigned on tariffs and ripping up trade agreements, its something he rants about almost every single day since his inauguration. Yet the crazy volatility didn't start until after Powell assumed fed chair and started the shift to a more hawkish approach to monetary policy.

Investors in America have routinely wet the bed over the past 5+ years over anything that could even hint at the tiniest of rate rikes. I think too much focus is being placed on Trump's trade policy as the major reason for the high volatility this past year, rather than the Fed finally reaping what they sowed for the past 10 years with their terrible and historically uncharacteristic behavior.

Reuters: Wall Street stresses over White House comments

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