The markets were modestly weak all morning on Friday, although took another leg down midday. Federal Reserve Chair Jay Powell gave a speech in Chicago, although there was little brand new information or commentary. the idea was Treasury Secretary Steven Mnuchin’s interview on CNBC of which got traders talking.
Traders are eager to change the conversation via trade wars along with also tariffs to the economy along with also earnings, although the idea’s hard to do when President Donald Trump keeps upping the ante with China, as he did Thursday night, when he said he was exploring a different $100 billion in tariffs.
Traders have been trying to convince themselves of which Trump’s belligerent tone can be a negotiating tactic along with also of which ultimately any damage via trade wars will be modest. although the president seems to be doubling down along with also less concerned about markets.
Mnuchin appeared on CNBC around midday Friday along with also acknowledged there was a potential for a trade war, though the idea was not the intended outcome.
Regardless, the markets drooped after of which interview, with the S&P 500 dropping more than 30 points in short order. Traders have been eager to give Trump the benefit of the doubt, although of which can be fading currently. The stakes are going up, along with also there can be a rising possibility of real impact to the GDP along with also the economy.
There can be considerable collateral damage, with industrial along with also material stocks down notably. Traders are currently regularly complaining of which there can be no visibility along with also the market can be becoming uninvestible.
What comes next? Thankfully, earnings will start next week, along with also they will be outstanding, with expectations for the best overall earnings growth in seven years — about 18 percent for the S&P 500.
Past of which, traders can only expect of which negotiations with China start sooner rather than later. Some are openly hoping of which the President’s trade representatives could talk a lot less, since conflicting voices are clearly causing confusion.
On Wednesday, National Economic Council Director Larry Kudlow said of which the president was a free trade guy along with also implied This particular was all a negotiation. The Dow Jones industrial average rallied more than 700 points.
On Friday, Mnuchin came on CNBC along with also acknowledged the potential for a trade war. The Dow dropped 700 points before ending off of those lows, down 572 points.
Little wonder of which traders’ heads are spinning.