Manufacturing Contracts for the Month of August

[busybee01]

Manufacturing is contracting for the first time in years.

Housing starts are slowing too.

U.S. manufacturing contracts as trade war with China bites - Reuters

In fact, manufacturing output has slowed around the globe and there are no indications it has anything to do with China.

That is going to be Trump's excuse in 2020? It will not fly with voters who disapprove of Trump's trade policies. A trade war has collateral damage and the slowdown worldwide is a part of that collateral damage.

 

[busybee01]

The bond market is generally more trustworthy than the stock market, and they've seen a slowdown coming for the last nine months. In that time, the yield on a 10-year treasury has dropped an amazing 55%. Unless things change fairly quickly, anything less than a 50bps rate drop by the Fed after their next meeting won't be welcome news in markets.

Nothing is inevitable, though. We still could see some upside surprises, and maybe we'll improve from the current mediocre 2.0% GDP. The trade war threw a monkey wrench into things, and China might well be waiting until after the 2020 to make any solid trade commitments, but you never know. We do need a spark fairly soon, and it could easily be that China is hiding how bad the trade war is hurting them too.

Historically there has been a 12 month to 18 month lag time between the first moment the yield curve inverts to an actual recession, so there's still time to see things improve.
.

The bond markets have been fearing Trump's trade wars as well. Don't forget that this was going on for many months before China with Trump's tariffs on steel and such things as washing machines. Many users of steel have had problems with the higher steel prices and it has taken the profitability out of business' that are struggling to make it. The fact is that there are no winners in a trade war. Only losers. China may be hurting but so are we.

 

[toomuchtime_]

Manufacturing is contracting for the first time in years.

Housing starts are slowing too.

U.S. manufacturing contracts as trade war with China bites - Reuters

In fact, manufacturing output has slowed around the globe and there are no indications it has anything to do with China.

That is going to be Trump's excuse in 2020? It will not fly with voters who disapprove of Trump's trade policies. A trade war has collateral damage and the slowdown worldwide is a part of that collateral damage.

I am sure that's what the Democrats will claim, but consider this:

More than two-thirds of American voters want the U.S. to confront Beijing over its trade policies despite believing that they are suffering more from tariffs than China, a Harvard CAPS/Harris Poll survey released exclusively to The Hill found.

The poll showed 63 percent of registered voters said that tariffs imposed on Chinese products ultimately hurt the U.S. more than China, while 74 percent said that American consumers are shouldering most of the burden of those tariffs.

But 67 percent said that it is necessary to confront China over its trade practices, which President Trump and his allies have deemed unfair to the U.S.

“President Trump has the strong support of the American public when it comes to standing up to China,” Mark Penn, the co-director of the Harvard CAPS/Harris Poll, said. “They realize that the tariffs may have negative impacts on jobs and prices, but they believe the fight here is the right one.

Poll: Voters want US to confront China over trade

 

[Mac1958]

The bond market is generally more trustworthy than the stock market, and they've seen a slowdown coming for the last nine months. In that time, the yield on a 10-year treasury has dropped an amazing 55%. Unless things change fairly quickly, anything less than a 50bps rate drop by the Fed after their next meeting won't be welcome news in markets.

Nothing is inevitable, though. We still could see some upside surprises, and maybe we'll improve from the current mediocre 2.0% GDP. The trade war threw a monkey wrench into things, and China might well be waiting until after the 2020 to make any solid trade commitments, but you never know. We do need a spark fairly soon, and it could easily be that China is hiding how bad the trade war is hurting them too.

Historically there has been a 12 month to 18 month lag time between the first moment the yield curve inverts to an actual recession, so there's still time to see things improve.
.

The bond markets have been fearing Trump's trade wars as well. Don't forget that this was going on for many months before China with Trump's tariffs on steel and such things as washing machines. Many users of steel have had problems with the higher steel prices and it has taken the profitability out of business' that are struggling to make it. The fact is that there are no winners in a trade war. Only losers. China may be hurting but so are we.

Sure, let's remember that Trump educated us on Trade Wars in March of 2018: "Trade wars are good, and so easy to win".

On March 22, 2018, Trump signs a memorandum, (1) directing the filing of a WTO case against China for discriminatory licensing practices, restricting investment in key technology sectors, and imposing tariffs on Chinese products, such as aerospace, information communication technology and machinery (The US-China Trade War: A Timeline - China Briefing News).

That was pretty much the start of the trade war. Remember, trade wars are good, and easy to win.

Since that date, the stock market us up just 7.38% annualized and 10-year bond yields are down 23%.
.

 

[georgephillip]

Manufacturing is contracting for the first time in years.

Housing starts are slowing too.

U.S. manufacturing contracts as trade war with China bites - Reuters

Capital spending is also in decline, in spite of Trump's blather:

A Decline in Capital Investment Reveals the False Promise of Trump’s Tax Bill

"With Donald Trump using his Twitter feed as a flamethrower on a daily basis, other significant developments, particularly policy ones, often don’t get the attention they deserve.

"Take last week’s G.D.P. report from the Commerce Department, which detailed a sharp slowdown in capital spending by American businesses during the second quarter of this year.

"To understand the full significance of this development, you need to go back to the first year of the Trump Administration."