tyb
U.S. stock futures tumble after Trump threatens China with steeper tariffs
(they have recovered a little from the initial drop-still down the most since the start of the year)
(Reuters) - Wall Street stock index futures fell sharply on Sunday after U.S. President Donald Trump said he would hike U.S. tariffs on $200 billion worth of Chinese goods this week and soon target hundreds of billions more.
Trump’s announcement came ahead of another round of talks between U.S. and Chinese officials in Washington scheduled for this week. White House officials were unaware on Sunday afternoon if Trump’s tweet would affect those talks. The Chinese delegation could decide not to come because of what is likely to be seen as an escalation by the president.
Investors were taking risk off the table on concerns that Trump’s threat would halt progress in talks between the world’s biggest economies, especially since some recent gains in U.S. equities were due to optimism they would reach a deal.
“It’s obviously not good news for the market. The administration had sent signals an agreement was close before. This causes us to question how close we are,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
While S&P futures eased their losses they were still down on as the evening wore on.
After falling as much as 1.8%, S&P 500 e-minis were down 40 points, or 1.36%, with 93,139 contracts changing hands. Nasdaq 100 e-minis were down 119 points, or 1.51%, in volume of 21,736 contracts and Dow e-minis were down 358 points, or 1.35%, with 14,154 contracts changing hands.
Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut said investors may not panic completely yet as they could see Trump’s comments as a negotiating tactic.
“I wouldn’t be surprised if we catch a bounce between now and tomorrow morning. With the president it could be a negotiating tactic,” said O’Rourke.
If this week’s scheduled meetings were canceled, pressure on equities could ramp up, he said.
“The next important thing is the reaction from China. Should China cancel the trip that becomes a bigger problem. People came into this weekend expecting there was a good chance we’d have a trade deal next Friday,” said O’Rourke.
“A deal with China has already been essentially priced in, if not fully. A large portion of the market will give the situation the benefit of the doubt to see what China’s reaction is. If China reacts in a negative way and it turns out to be an escalation the market would see further headwinds.”
The S&P 500 has gained 17.5% so far this year partly due to a decision by the U.S. Federal Reserve to put rate hikes on hold but also due to hopes for a China deal.
https://www.reuters.com/article/us-usa-trade-futures/u-s-stock-futures-tumble-after-trump-threatens-china-with-steeper-tariffs-idUSKCN1SB0SD?il=0
https://www.bloomberg.com/markets/stocks/futures
“I do think it’s hard for the market to go higher from here without a resolution,” said Cherry Lane’s Meckler.
have the same question, never really was any info after that habbening. I would guess yes
not likely wit hthat news and this action-can be erased in an instant so sending a message here.
heading down again now at -463. Like I said they control that alot moar-you have to match size and price, so not just basic market order's are processed. Moar to say that if you want to transact an exact lot size must be identified and at the exact price-there are no partial fill's. They are reacting to having their balls cuffed and don't like it-this is there way of showing it. Stuff whipping up and down al over the place.
He could have bought a bigger place
$230,466,529 in share sales since April 3rd, 2019
https://www.secform4.com/insider-trading/1326801.htm
S&P Futures Plummet As China Said To Cancel Washington Trade Trip, All Eyes On S&P 2,890
It's only appropriate that the S&P may be about to suffer its biggest drop of the year one day after hitting a new all time high.
For those who are only now catching up, the reason why futures are tumbling is that just after 12pm ET, Trump tweeted that trade talks - which according to the White House, media leaks and Larry Kudlow would be basically concluded by next week - are instead effectively dead, as the current 10% tariff will spike to 25% on Friday, while an additional $325BN in goods will be subject to new trade tariffs.
Some saw in Trump's tweet a retaliation for Friday's North Korea ballistic missile launch, the first since 2017, and one which would not have happened without the explicit blessing of Beijing.
Others were more nuanced, and Nomura's Charlie McElligott writing late on Sunday that "either this is an epic act “rope-a-dope” posturing and poker-playing from POTUS to collect a (self-perceived) “better” deal “win” thereafter…as the 500-handle rally in Spooz has given Trump enough confidence to absorb a market drawdown and again “lean-into” what some in the administration believe is Chinese “slow-playing”—all in an attempt from to extract additional last-minute deal concessions, after last week’s reported negotiation setbacks—OR a raging ‘miscalculation’ with “vigilante” markets."
For now it is looking like it's the latter, with futures tumbling and the Emini down a whopping 50 points on Sunday night, shaping up as the third biggest intraday drop of the year so far.
Meanwhile, the (non-USD) FX markes is getting absolutely crushed, with China proxies such as the Aussie and Kiwi tumbling, because, as McElligott adds, the key risk is that the offshore Yuan (CNH) may tumble - which it is currently, plunging over 1.3%, or the biggest move since Jan 2016, "as market forces anticipate that China may allow the Yuan to weaken considerably IF they choose to retaliate (a big “IF”), following their prior perceived ‘goodwill’ controlling of the exchange rate within a tight band the past three months for trade negotiation purposes."
Meanwhile, in an attempt to prevent a Sunday rout, Goldman published a note after 6pm Eastern, in which the bank's chief political economist, Alec Phillips, comments on Trump’s announcement that the tariff rate on $200bn of imports from China will rise from 10% to 25%, noting that it "lowers the odds of a successful conclusion to US-China trade talks and raises the odds of further tariff escalation. However, we think it is more likely that the increase will be narrowly avoided and believe the odds of tariffs increasing on Friday are 40%."
Well, it may be time for Goldman to rename itself Gartman Sachs, because the digital ink wasn't even dry yet on that note when the WSJ reported that China is considering canceling trade talks with the U.S. After Trump's sudden, unexplained threats, adding that:
Trump’s Tweets Threatening New Tariffs Surprised Chinese Officials
Decision Weighs on Whether Vice Premier Liu He Goes to Washington as Planned
Canceling Talks Conform to China’s Strategy Not to Negotiate Under Threat
And while the WSJ was somewhat tentative in its reporting, reporter Edwards Lawrence was far more convinced that it's pretty much game over: "Chinese Vice Premier Liu He has cancelled his trip to Washington this week for trade talks following a tweet by President Donald Trump threatening more tariffs because the talks have moved too slowly. "
Chinese Vice Premier Liu He has cancelled his trip to Washington this week for trade talks following a tweet by President Donald Trump threatening more tariffs because the talks have moved too slowly. #China #Trade #Breaking
— Edward Lawrence (@EdwardLawrence) May 6, 2019
There is a very large Asset Mgr ‘net long’ in US Eq Futs, as they currently hold a total $123B net long notional position across US Equities Futures (SPX, NDX, Russell)—with $62.4B / half of the overall position bought YTD alone
As half of this position then is deeply ‘in the money,’ it would make sense that an extreme ‘risk-negative’ reaction to this news by the market tonight / tomorrow could elicit AM profit-taking to monetize some of this performance YTD.
Finally, with the Emini back under 2,900 all eyes are now back on 2,890 - that's both where dealer gamma turns negative again, selling begets more selling.
For the TL/DR crowd: Steven Mnuchin better have the PPT on speed dial.
https://www.zerohedge.com/news/2019-05-05/sp-futures-plummet-china-said-cancel-washington-trade-trip-all-eyes-sp-2890
told you it was not to be ignored.
This is going to sting tomorrow, warned at the first update this is for real.