For traders and investors, the political climate has been unlike anything we have ever seen in recent times!
There are plenty of opportunities if you know where to look. I will help to bridge the gap between Washington and Wall Street, finding you the best stock plays being driven by politics.
- Trump has been in a back and forth tariff battle with the Chinese for months and now has indicated that the EU may be subject to tariffs
- This is creating a tit for tat trade war between the world’s two largest economies, the United States and China
- As these trade war exchanges between the U.S. and China, in particular, unfold, world markets have experienced increased volatility
- Multinational companies are starting to voice concern that these trade fears are becoming the most significant risk to their respective businesses
- Multinationals just as 3M (MMM), DowDuPont (DWDP), United Technologies (UTX), General Electric (GE), Boeing (BA) and Caterpillar (CAT) have been under weakness as the tough trade rhetoric continues
Trade War Rhetoric Heats Up
Reports indicated that the Trump administration planned to block many Chinese companies from investing in domestic technology and block additional technology exports to China. It was reported that the administration was drafting rules that would apply to companies with at least 25% Chinese ownership from buying companies involved in "significant industrial technology." Despite these reports, Peter Navarro, a top trade advisor, said the market was overreacting to fears the administration would restrict foreign investment as part of its trade actions against China and other countries. "There are no plans to impose investment restrictions on any countries that are interfering in any way with our country. This is not the plan," he said. He insisted that markets were taking the wrong message from the reports, stating, "I would say more broadly I think today's market reaction is a very large overreaction," Navarro said. "What we have here with Trump trade policy is a tremendous success for this country and this market. It's very bullish." Going further, Treasury Secretary Steve Mnuchin stated that all of President Trump’s advisors were unanimous on the Chinese investment restrictions and that any mixed messages were unfortunate. Hence, part of the uncertainty that corporations and foreign governments are voicing concern. Continue reading "Tariffs Inducing Market Headwinds and Risks"
