The week ahead is a big one on the US economic calendar

What’s coming up in the week ahead

The final week of the month is always a busy one. Here’s what’s coming up in the week ahead.
Monday:
  • Chicago Fed national activity
  • Durable goods orders
  • Dallas Fed
Tuesday:
  • FHFA house price index
  • Case Shiller house price index
  • Richmond Fed
  • Conference Board consumer confidence
Wednesday:
  • Weekly oil inventories
  • Fed’s Barkin and Daly
Thursday:
  • Second look at Q2 US GDP
  • Advance goods trade balance
  • Wholesale inventories
  • Weekly jobless claims
  • Pending home sales
Friday:
  • PCE report
  • U Mich final consumer sentiment
  • Chicago PMI

Trump announces fresh tariffs on Chinese products, ramping up rates by 5%

Trump makes the announcement via Twitter

On October 1, Chinia is going to be hit by fresh tariffs.
Here’s the announcement, which was clearly timed to hit moments after the FX close:
For many years China (and many other countries) has been taking advantage of the United States on Trade, Intellectual Property Theft, and much more. Our Country has been losing HUNDREDS OF BILLIONS OF DOLLARS a year to China, with no end in sight Sadly, past Administrations have allowed China to get so far ahead of Fair and Balanced Trade that it has become a great burden to the American Taxpayer. As President, I can no longer allow this to happen! In the spirit of achieving Fair Trade, we must Balance this very unfair Trading Relationship. China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!). Starting on October 1st, the 250 BILLION DOLLARS of goods and products from China, currently being taxed at 25%, will be taxed at 30% Additionally, the remaining 300 BILLION DOLLARS of goods and products from China, that was being taxed from September 1st at 10%, will now be taxed at 15%. Thank you for your attention to this matter!
One thing that’s a bit unclear is the Dec 15 tariffs. I’m guessing those are still exempted until then.
All told, this isn’tĀ thatĀ bad. It could have been worse. He’s ramping up tariffs by 5%. It’s not some kind of apocalyptic announcement but it certainly continues the trend of escalation.
trade war

An ugly day for US equities. Major indices down for the week.

Dow falls over 600 points.Ā  Nasdaq down -3.0%

It was an ugly day for the US equities. The Dow fell over 600 points. The Nasdaq is closing down -3%.Ā  UGLY.
The escalation of the trade ward is to blame. Pres. Trump has threatened retaliation for the new China tariffs.Ā  He also continued the criticism of the Fed’s Powell.
The final numbers are showing:
  • The S&P fell -75.84 points or -2.59% at 2847.11
  • The Nasdaq fell -239.62 points or -3.00% at 7751.77
  • The Dow fell -623.34 points or -2.37% at 25628.90
Looking at the % ranges for the major indices below, the major indices in US and Europe all closed at or near the session lows today.
Dow falls over 600 points.Ā  Nasdaq down -3.0%

Looking at the point changes, the Dow was down -745 points at the lows.

The point changes of the major indices
For the week, the major indices are ending the week in the red as well:
  • The S&P fell -1.43%
  • The Nasdaq fell -1.83%
  • The Dow fell -0.99%.
Big losers today:
  • AMD, -7.4%
  • Broadcom, -5.39%
  • NVIDIA, -5.16%
  • Tesla, -4.84%
  • Qualcomm, -4.71%
  • Apple, -4.62%
  • Alibaba, -4.29%
  • Micron, -4.06%
  • Intel, -3.89%
  • American Express, -3.65%

European shares close lower and near session lows

Shares fall as trade fears intensify

TheĀ European shares are closing lower on the day, and near session lows.
TheĀ provisional closes are showing:
  • German DAX, -0.9%
  • France’s CAC, -1.0%
  • UK’s FTSE, -0.3%
  • Spains Ibex, -0.6%
  • Italy’s FTSE MIB, -1.65%
  • Portugal’s PSI 20, -1.33%
For the week, theĀ major indices are still mostly higher:
  • German DAX, +0.4%
  • France’s CAC, +0.68%
  • UK’s FTSE, -0.1%
  • Spains Ibex, unchanged
  • Italy’s FTSE MIB, +1.0%
In other markets as London/European traders look to exit
  • spot gold is up $28.50 or 1.91% at $1526.80
  • WTI crude oil futures are down $1.70 or -3.07% at $53.65
In the US stock market prices are sharply lower:
  • S&P index -50 points or -1.71% at 2873
  • NASDAQ index down -160 points or -2.0% at 7832
  • Dow industrial average -428 points or -1.63% at 25826
In the US debt market yields are sharply lower:
US yields are lower
European benchmark 10 year yields are also mostly lower (but not as low as US yields).
European yields are mostly lower

USD/JPY falls as risk trades crumble on Trump threat

Trump’s threat hits hard

Forget Powell, the market is entirely focused on Trump now and what he’s going to announce this afternoon.
Gold is soaring, stocks are crumbling and USD/JPY is at the the lowest since Aug 13, down 80 pips.

Trump's threat hits hard