Archives for June 2018

June 2018 - Page 3 of 18 - Money Morning - Only the News You Can Profit From

Why I Know the "Tariff Tantrums" Will Blow Over

Here are a few things markets don't like:

Geopolitical leadership that doesn't follow a logical path

Uncertainty of any kind

The prospect of contracting economies

On Monday, we got truckloads of all three. And they all came from the trade war news headlines.

The effect was self-reinforcing – and profound.

There was no shortage of illogical geopolitical leadership on display: The U.S. and Chinese presidents (with some European Union officials thrown into the fray for good measure) exchanged barbs about tariffs that sounded more like pregame locker-room posturing than international statesmanship.

And, as we've seen, when emotion enters the process, traders and investors get worried that it could add to the uncertainty.

And one pithy quote sums up the uncertainty the markets felt yesterday.

The Wall Street Journal reported a quote from President Xi of China: "In the West you have the notion that if somebody hits you on the left cheek, you turn the other cheek," Xi said in the report, according to people briefed on his remarks. "In our culture, we punch back."

A biblical analogy: Check.

Open-ended, ominous threat: Check.

That's the height of uncertainty.

Of course, at the root of all this is the prospect of contracting economies. That's the ultimate goal of a trade war, after all – to do such damage to the "other guy's" economy that they blink first. 

If tariffs stick (and tens of billions of dollars' worth are already in force), we'll see the real economic slowdown. Goods will become more expensive for consumers, so they'll buy less of them. Pretty simple stuff from that perspective.

And so, with that triumvirate of market-rocking news, the major U.S. indexes had their biggest down day since…

…The last tariff tantrum on May 29th.

So the big question before every investor this week is: Is this all coincidence? Or is the "Trump growth" narrative asserting its dominance?

I think it's the latter, and I'll show you why that's important with a few charts here...

Use This Strategy to Protect Yourself Against Bitcoin Price Rigging

If you suspected Bitcoin price rigging is going on, you're not alone. The U.S. Justice Department and the Commodity Futures Trading Commission are conducting a joint investigation into possible Bitcoin price manipulation at multiple exchanges.

And at least one study has pointed a finger at the Bitfinex exchange. But that leaves cryptocurrency investors wondering what they should do with this information.

Whatever is really going on, investors just need to stick to these simple guidelines...