I was typing “slight gain at the close? But it looks very Mag7 / Fateful8 driven.” But then someone asked a message at work, I respond back, come back and the S&P is down 35 points in 3 minutes and the NASDAQ has flipped red.
Still looks very M7/F8 biased, if not for them we’re probably much lower.
From my understanding, US manufacturers have largely abandoned building small cars. Given the price of gas in the EU, the density, and congestion, is there ever going to be a huge demand for the large pick-up trucks and SUV that US manufacturers are concentrating on?
Looks like it was a bad day to be in bonds.
US manufacturers bailed on small cars and piled into SUVs and trucks for the same reason they did it back in the early 2000s: SUVs and trucks have much higher profit margins … if consumers are willing to pay those prices.
If they’re not, … well, then you have what happened when that strategy failed in the early 2000s and the same manufacturers got roasted.
Hedge funds have been unwinding their basis trades.
Massive deleveraging going on right now. The concern now is that this could get worse due to Trump and the coming US recession.
I am buying into high dividend paying stocks and staying there for a while, as I don’t see Trump negotiating in good faith given that he is being advised by Navarro.
This is fairly accurate.
Agreed. Depends on gas prices according to Lee Iaccoca. People like small cars when gas prices are high and large ones when they are low. Profit margins on small cars are low since foreign manufacturing companies compete more on those (not sure if it’s because large are more costly to transport over, or because foreign companies have a foreign customer base as well that is less interested in supersizing everything, or some other reason.)
Hope folks can access this link as Ray Dalio’s comments are interesting, as always.
That and bonds are most of my (non retirement) portfolio and they took a bit of a hit on LT rates.
10-30 years went up 10-15bps today.
There are lots of reasons that large cars cost more.
Of course, just the additional sheet metal, larger engines, higher shipping costs also contribute to the price of large cars, but this is mostly a function of demand. I don’t think we can say, either, that import manufacturers have ignored large cars, domestics are just more competitive in the large car space than small cars.
Anyone want to go out on a limb and guess what it means near-term if the entire bounce from the open bleeds off before the close?
Aaaaand, in the red. Wouldn’t be surprised if we close up 2% because nothing makes sense now, but my best guess is we have more red to come since nobody is flinching on the trade war.
We might close green but that’s wishful thinking in my book. More red coming soon.
<klaxonhorn.mp4>
104% tariffs on China can do that.
We sure he didn’t forgot to subract 1? Maybe it’s really 4%
1.04%
If Trump gets trade deals with the EU and China that are favourable to the US, I expect most of the loss of the past week will be recouped quickly. EU will be easier than China. Probably nothing happening with the other two major US trading partners, Canada and Mexico, until after the Canadian election.
It may be that a lot of buyers that had an automatic buy at 4850 were already flushed out last week so there won’t be such a bounce back.
