President’s Remarks Remind Markets There’s Still A Trade War Going On

At a cabinet meeting today President Donald Trump wanted to remind everyone that he could still impose additional tariffs on Chinese imports if he wants. The President also expressed impatience that the truce in the trade war with China hadn’t yet resulted in a pickup on Chinese purchases of U.S. farm products. After his end if June meeting with Chinese President Xi Jinping, Trump had announced that China had promised to big big amounts of U.S. farm goods. The Chinese have been conspicuously silent about any promised purchases of U.S. farm goods.

“China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon!” President Trump wrote on Twitter. The U.S. expects China to announce significant purchases from U.S. farmers, Trump’s top economic adviser, Larry Kudlow, told reporters on Monday, implying that this step is necessary for trade talks between two nations to progress.

Wall Street was listening, apparently. As of 2:30 p.m. New York time major U.S. indexes have snapped a five-day rally. The Standard & Poor’s 500 is off 0.4% and the Dow Jones Industrial Average has slipped lower by 0.08%.

Oil markets are, apparently, even more worried about a resumption of the trade war. U.S. benchmark West Texas Intermediate is down 3.84% to $57.29 a barrel. International benchmark Brent crude is off 3.63% to $64.07 a barrel.

The President’s remarks outweighed comments from Federal Reserve Chairman Jerome Powell at a Tuesday dinner in Paris that the central bank is “carefully monitoring” downside risks to U.S. growth and “will act as appropriate to sustain the expansion.” This basically repeated Powell’s line in his testimony to Congress last week.

The yield on the 10-year U.S. Treasury rose 3 basis points to 2.12%. The yield on the 2-year note remained at 1.86%.

Gold slid 0.33% to $1408 an ounce. The dollar climbed on the Dollar Spot Index by 0.46% as the euro and the yen both fell.