Markets Trying To Get Ahead Of Today’s Tariff News

The only thing that is (relatively) certain is that President Trump will announce $50 billion in tariff and other trade restrictions aimed at China. That announcement is scheduled for 12:30 p.m. today in Washington.

There’s plenty of speculation today about the nature and extent of China’s response. Will it be restrained? Much of the talk from Beijing before today has called for talks and focused upon the damage to the global system of trade that would result if the United States went ahead with its tariff plans as sketched out to date. Or will the Chinese respond tit for tat? More recent talk from Beijing has stressed the need to respect China’s sovereignty and the imperative to respond to the U.S. “attack”? The Wall Street Journal reported on Wednesday that China is preparing to hit back at Trump’s planned sweeping tariffs with levies aimed at industries and states which tend to employ his supporters, citing unidentified people familiar with the matter.

But the speculation today has been just that–speculation. The market is selling this and dumping that in an effort to get ahead of the possibility of a trade war.  But without any certain knowledge of what the extent of that war might be.

So as of 11 a.m. this morning investors were selling Boeing (BA)–down 2.68%–since Boeing is a almost certain target of any Chinese retaliation. Emerging markets were off with the iShares MSCI Emerging Markets ETF (EEM) down 2.66%  on the read–accurate I think–that emerging markets will take the brunt of any U.S.-China trade war.

The yield on U.S. 10-year Treasuries was down and prices up as traders moved to safety. As of 11 a.m. the yield was down to 2.82%, a drop of seven basis points from yesterday.

Gold was up modestly by 0.58% to $1335 an ounce.

I’ll be tuning in the President’s announcement to hear if there’s anything unexpected in the details.