Market Brief: Trump’s Tariffs Shock Markets
Matt Weller, CFA, CMT August 1, 2019 3:52 PM
See a summary of the market themes and trends from today's US session!
- FX: President Trump triggered a rush for safety midway through today’s US session when he tweeted that the US would impose 10% tariffs on $300B of Chinese goods that are not currently taxed. As a result, the safe haven yen was the strongest major currency on the day and the risk-sensitive Aussie was the weakest.
- AUD/JPY fell 2% on the day and is on track for its lowest close since 2010.
- See our preview for tomorrow’s NFP report.
- Commodities: Oil cratered on the surprise announcement, falling by more than 7% on the day. Gold shined, rising 1% as risk assets fell.
- US indices collapsed on the tariff headlines, dumping from +1% on the day to trade down by more than 0.5% across the board.
- Utilities (XLU) were the strongest sector, with their generally high dividends in demand as bond yields tanked. Energy stocks (XLE) were the weakest major sector, dragged down by the big drop in oil prices.
- Stocks on the Move:
- Verizon (VZ) managed to buck the broader weakness and gain about 0.5% after reporting strong Q2 earnings.
- Yum Brands (YUM, +4%) reported better-than-expected declines in earnings and revenue.
- General Electric’s (GE) CFO is stepping down after less than 2 years, prompting the stock to fall 4% on the day.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.