As Trump Heads to New Jersey, Traders Hope He Leaves His Phone in D.C.
(Bloomberg) -- President Donald Trump's latest Twitter salvo in the U.S.-China trade war is upending not only financial markets but also traders' hopes that August vacations will prove restful.
“Did President Trump Kill Buying the Dip and My Vacation,” Peter Tchir, head of macro strategy at Academy Securities, titled a note to clients Friday.
U.S. shares began to swoon and the benchmark 10-year Treasury yield slid to its lowest in over three years Thursday after Trump tweeted out of the blue that he would slap new tariffs on Chinese goods. China has vowed to retaliate.
The president dropped the bombshell in a moment of relative calm. By midday Thursday, stocks had recovered from the slump that followed Wednesday's Federal Reserve meeting, which spurred angst that policy makers were noncommittal about further easing.
“I was easing into vacation mode,” Tchir groused in the note. “Thinking about packing and hopefully not having to track markets that closely. That all changed” after Trump announced the new tariffs in a series of tweets just before 1:30 p.m.
President Trump is scheduled to leave Washington at 4 p.m. Friday for his golf resort in Bedminster, New Jersey. But there was plenty more action in the hours leading up to his departure. Yields and shares got a brief bump higher Friday after CNBC reported that Trump was open to halting or delaying the new 10% tariff if China takes action before the Sept. 1 implementation date.
The 10-year Treasury yield, after falling below 1.83% in European trading Friday, the lowest level since November 2016, briefly recovered to 1.90% before stabilizing around 1.87%. The July employment report, released about half an hour earlier, had minimal impact on the market, leaving intact for now expectations that the Fed will cut rates again this year.
All of which “will make it more difficult to stay away from the screens while on vacation next week,” Tchir said.
--With assistance from Saleha Mohsin.
To contact the reporter on this story: Liz Capo McCormick in New York at emccormick7@bloomberg.net
To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Elizabeth Stanton, Nick Baker
©2019 Bloomberg L.P.
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