By Shawn Langlois, MarketWatch
White House economic adviser Larry Kudlow, in a tweet that put an awkward exclamation point on Friday’s big stock-market rally, cheered “we’re killing it on the economy” and it’s “totally awesome.”
Nice timing, Lar.
In the first trading session since that tweet went viral, it certainly doesn’t feel totally awesome for traders who were anticipating good news on the trade front. Instead, the president announced Sunday that tariffs on $200 billion in Chinese goods will be increased on Friday to 25% from 10%.
“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump wrote in the surprise announcement.
Next thing you know, traders couldn’t dump stocks fast enough, and Trump returned to rage-tweeting about collusion and “Angry Democrats.”
But back to what this means for investors.
In our call of the day , Michael O’Rourke, chief market strategist at Jones Trading, suggests the selling might be overdone, considering the market over the past five years has generally taken the most optimistic view of any potential obstacles.
“The challenge for investors,” O’Rourke explained in an note, “is deciphering whether this another bluff by the president, an attempt to lower expectations in order to provide an upside surprise or actually a potential breakdown of the trade negotiations and an escalation of the trade war.”
It looks like skittish investors are approaching his tweet like the latter rather than, as TS Lombard’s Eleanor Olcott described it to Barron’s, Trump merely exercising his “Art of the Deal” tactics to deliver some surprise to the upside.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.50% , S&P 500 /zigman2/quotes/210599714/realtime SPX +0.77% and Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.80% dropped sharply as trading got underway but managed to bounce nicely off the lows.
The equity selling crossed borders, with both Europe /zigman2/quotes/210599654/delayed XX:SXXP +1.09% and Asia /zigman2/quotes/211618636/realtime XX:ADOW -0.58% caught in the stiff downdraft. The Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP -0.68% was hit particularly hard, losing 5.6%.
Read more in Market Snapshot.
Beyond Meat /zigman2/quotes/211617595/composite BYND -1.64% last week became the best performing first-day consumer IPO in two decades. The stock’s been able to hold much of those gains, but it’s worth watching this week to see if investors still have an appetite. The team at Renaissance Capital was mostly lukewarm on the meatless product itself. “Pretty good. But not like, 20x-forward-sales-good,” one analyst said .
Boeing’s /zigman2/quotes/208579720/composite BA +0.59% woes continues, with government officials reportedly claiming the company didn’t share information about a problem with a cockpit safety alert for about a year before the issue drew attention with the October crash of a 737 Max jet in Indonesia. After that, Boeing gave some airlines and pilots partial and inconsistent explanations, the Wall Street Journal reported.