06Jul2018 Pre-Market Commentary: Wall Street Futures Slip, Trade War Begins, US And China Exchange $34 Billion In Tariffs, WTI Crude Falls Fractionally Into The 72 Handle

Here is the current market situation from CNN Money

European markets are lower today with shares in London off the most. The FTSE 100 is down 0.37% while France’s CAC 40 is off 0.11% and Germany’s DAX is lower by 0.02%.

U.S. job growth strong; unemployment rate rises to 4 percent

U.S. job growth increased more than expected in June as manufacturers stepped up hiring, but steady wage gains pointed to moderate inflation pressures that should keep the Federal Reserve on a path of gradual interest rate increases.

Stock futures dip as U.S.-China tariffs kick in; jobs data awaited

U.S. stock index futures dipped on Friday after the United States and China slapped tit-for-tat duties on $34 billion worth of each other’s imports, triggering what Beijing called the “largest-scale trade war.”

China blames U.S. for ‘largest-scale trade war’

The United States and China slapped tit-for-tat duties on $34 billion worth of each other’s imports on Friday, with Beijing accusing Washington of triggering the “largest-scale trade war” as the world’s two biggest economies sharply escalated their conflict.

Oil slips below $77, weighed down by Saudi output boost, trade tensions

Oil slipped below $77 a barrel on Friday, under pressure from higher Saudi production and trade tensions between the United States and China, despite support from oil supply disruptions.

Dollar weakens as U.S. tariffs kick in; U.S. jobs data eyed

The dollar fell on Friday as the United States and China slapped tariffs on the other’s imports, but a muted reaction in currency markets suggested the escalation had largely been priced in by investors focusing on a U.S. jobs report due later in the day.

Airbus upbeat on prospect for A400M export contract this year

Airbus said on Friday it was optimistic it could sign a first export contract for its troubled multi-nation A400M military transport plane this year, and expressed growing confidence about prospects for European defense cooperation.

Trump’s $500 billion trade threat makes China’s already battered investors shiver

Six months of wrangling over trade tariffs with the United States has wiped out about a fifth of China’s stock market value and driven its currency down sharply. But those moves may have just been a downpayment on what is yet to come.

Ford slides deeper into China rut after worst ever first-half vehicle sales

Ford Motor’s China slump intensified, with vehicle sales tumbling 38 percent in June and the automaker recording its worst ever first-half, as buyers shunned its aging models that are awaiting overhauls and flocked to rivals.

Acid attack manager rushed back to work to deal with Innogy break-up

Plans to break up German utility Innogy led its finance chief to rush back to work just two months after he had been in intensive care following a disfiguring acid attack.

Chinese Ports Begin Delaying Clearing Of US Goods

Rumors that US companies have been experiencing unspecified “difficulties and delays” while trying to get their goods through customs in China have been circulating for weeks – ever since reports surfaced alleging that Chinese officials had warned US executives that China would come down hard on US firms in retaliation for Trump’s trade war. And now that the Trump administration has finally imposed the first round of tariffs, Reuters is reporting that several major Chinese ports are delaying the clearing of goods from the US as officials await further instructions from the central government. These delays could seriously disrupt imports – especially of agricultural products like pork and soybeans which were targeted by Beijing for tariffs.

An official at the port of Shanghai told Reuters that the clearing of some US imports through customs had been halted.

There did not appear to be any direct instructions to hold up cargoes, but some customs departments we …

“We Are Wrong In Being Short”: Gartman Stopped Out Of S&P500 Short

Less than 24 hours ago, we excerpted some of the most salient commentary from the latest Gartman letter, according to which “[S]trength is to be sold into; weakness is only to be bought after the market has been sold. If one sells a thousand shares on strength, on weakness one might wish to buy back only half of that, with the intention of selling another thousand on any subsequent strength. This is now a bear market; trade then accordingly.”

More importantly, we noted that his latest trade reco, to short the S&P500, saw its blended stop price lowered from 2747 to 2741, one which was noted was just points away from being triggered.

Gartman 5 points away from being stopped out on S&P short https://t.co/ewdsgG8KsI

— zerohedge (@zerohedge) July 5, 2018

Well, just a few hours later Gartman decided to end the suspense and in his Friday note confirmed that he was now stopped out, to wit:

… we have been short of the US equity market for the past several weeks and for a while that position looked wise, and in fact it was wise enough for us to have added to that initial short position, intending… as had been clearly stated… to add to that position again. Indeed, we came very close to having done precisely that. But all positions must be considered in light of each new day; risks must be assessed, and positions adjusted as needed. Simply put then, we are wrong in being short… for the moment at least… and as we write our stop order in the S&P futures has been touched off, for in yesterday’s commentary we moved our stop down in the nearby futures from $2747 to …

Trump Offers Elizabeth Warren $1 Million To Prove Native-American Heritage

Reverting to his campaigning days, President Trump offered some red meat to his base during an appearance at a campaign rally in Montana on Thursday when he joked about offering Massachusetts Senator Elizabeth Warren $1 million to take a genetics test that would prove (or disprove) her native American heritage.

Trump lobbed insults at “Pocahontas”, adding that he wouldn’t apologize for using what some believe to be a racially charged nickname.

Claiming that Warren has “based her life” around “being a minority,” Trump said that if Warren wins the Democratic nomination in 2020, he would offer her $1 million to take a DNA test to conclusively prove that she does have Native American heritage.

“But let’s say I’m debating Pocahontas, I’ll do this,” Trump said during a rally in Great Falls, Mont. “Pocahontas, they always want me to apologize for saying it. You know those little kits you see on television for $2 – learn your heritage – we will very carefully take that kit, since we’re in the #MeToo generation, we’ve got to be very gentle, we will gently take that kit and we will slowly toss it, hoping it doesn’t hit her and injure her arm, even though it only weighs probably 2 oz.,” Trump said.

“And we will say, ‘I will give you a million dollars, paid for by Trump, to your favorite charity if you take the test and it shows you’re an Indian,” Trump said. “And we’ll see what she does. I have a feeling she will say no but we will hold it for the debates.”

Trump often attacks Warren at his rallies, like he did at a rally in Nevada last month. However, he once ag …

Volatile Markets On Edge As Trade War Begins Amid Confusion

“Clearly the first salvos have been exchanged and in that sense, the trade war has started. There is no obvious end to this” – Louis Kuijs, chief Asia economist at Oxford Economics.

The “largest-scale trade war in economic history” (as defined by China) launched at midnight, when the US announced $34 billion in tariffs on Chinese exports, and… confusion followed.

Duties on Chinese goods started just after midnight, or at 12:01 a.m. Friday in Washington, and just after midday in China. Another $16 billion of goods could follow in two weeks, Trump earlier told reporters aboard Air Force one, before suggesting the final total could eventually reach $550 billion, a figure that exceeds all of U.S. goods imports from China in 2017.

As we noted earlier, while China vowed to respond with countermeasures to the “unfair” US tariffs, no explicit announcement of just how China would retaliate followed immediately. Adding to the confusion, state-owned news agency Xinhua reported that China’s tariff actions in response took effect at 12:01 pm, however here too there was no detail, and the result was a spike in risk, as traders assumed that China was perhaps willing to concede early on without an explicit response.

Oil’s Twitter War May End Badly for Trump

President Donald Trump’s use of Twitter to jawbone the price of oil is in danger of backfiring and nearly did before the OPEC meeting in Vienna.

Economic Report: U.S. trade deficit falls 6.6% to 19-month low just before Trump tariffs kick in

The nation’s trade deficit sank 6.6% in May and slid to a 19-month low, just a month before the first wave of U.S. tariffs on foreign goods in a broadening dispute over unfair trade practices. The deficit declined to $43.1 billion in May.

Economic Report: U.S. adds healthy 213,000 jobs in June, but unemployment rate backs up to 4%

The U.S. created 213,000 new jobs in June, another hearty gain that shows companies are finding ways to fill open jobs despite a dwindling pool of skilled workers. In a surprise, though, the unemployment rate rose to 4% from 3.8%.

Mark Hulbert: Here’s why the odds are good that stocks will be higher at the end of 2018

Second years of presidential terms typically favor stock investors, writes Mark Hulbert.