Everything was looking so awesome this morning, until Commerce Secretary Wilbur Ross told a group in Davis that China's 2025 Technology Plan was a "direct threat" to the US, sparking another round of protectionist-fear-driven selling in stocks. From Bloomberg:
- ROSS: CHINA `SUPERB' TALKING FREE TRADE, ACTING PROTECTIONIST
- ROSS: STEEL FORUM HAS MADE `ZERO DIFFERENCE' FOR OVERCAPACITY
- ROSS: CHINA IS EXPORTING MORE STEEL THAN U.S. HAS IN CAPACITY
- COMMERCE'S ROSS: CHINESE IP REPORT WILL STILL `BE LITTLE WHILE'
- ROSS: IT WAS NO ACCIDENT THAT U.S. DIDN'T DROP TTIP W/ EUROPE
- ROSS: THERE'S GROWING RECOGNITION OF ACCUMULATED TRADE RISKS
Some note, however, that the Bloomberg headlines hit minutes after the stock dip was already underway, so it may be an exercise in goalseeking a reason for the drop.
Trannies were already under pressure from United's drop, but Ross' comments pushed The S&P red briefly...
The move in stocks has also been assigned to the fact that 10Y Yields are back at 2.66%, triggering fears that TINA is over and the cost of funding buybacks is soaring.
Interestingly, no reaction in bonds or the dollar (which both continued their trends lower in price).