From Spat to War, Trump Keeps Digging Self Out of Trade Hole
Up until today, the tit for tat trade spat between the United States and China has been child’s play. But now, with US President Donald Trump bringing out the heavy artillery, threatening a 10% tariff on $200 billion in Chinese goods, it could erupt into a full blown trade war. It’s every country against itself. It started when Trump announced tariffs on $50B in Chinese goods on Friday, to which China retaliated against itself by announcing tariffs on $50B in American products, to which Trump retaliated against US consumers by bringing out the big guns on $200B. That’s almost half of all Chinese imports. Stock futures are not happy with this dance of mutual suicidality, and the S&P (^GSPC) is trading down over 1% in the premarket.
Is OPEC Up To Something naughty in Lybia?
While Iraq, Iran, and Venezuela have been bickering with Saudi Arabia about upping oil output, a massive explosion in Lybia has cut its capacity by 400,000bbl/d and could get worse. As reported by Financial Times, an oil port at Ras Lanuf has exploded amid clashes between a bunch of warlords both seeking to control the country ever since Muammar Gaddafi was killed in the aftermath of a US attack. Lybia’s entire oil industry is in danger of shutting down, and it reached 1 million bbl/d this year. Perhaps now, Iraq and Iran may acquiesce to Saudi Arabia’s output expansion plans. As luck would have it. Crude oil (NYSEARCA:USO) rebounded yesterday after a selloff, but is down about 1.3% today.
Senate Torpedoes ZTE Reprieve for China
In more Chinese news that will certainly not ease the trade war, the Senate introduced an amendment into the National Defense Authorization Act that would torpedo President Trump’s deal to enable China telecom firm ZTE (OTCMKTS:ZTCOY) to continue doing business with American suppliers. The bill passed 85-10, with one of the only Republicans voting against it and on Trump’s side being Rand Paul of Kentucky. ZTE shares are down nearly 25% in Hong Kong.
Square Gets New York Bitcoin License
Square (NYSE:SQ), the pay app company, just got a bitcoin license from the Department of Financial Services in New York. This may have something to do with bitcoin’s (BTC-USD) pop back above $6,700 yesterday. This means that users of the square app in New York can send bitcoin to one another. Square shares are up over 80% on the year. Meanwhile, the face of cryptocurrency in the US, Jon McAfee, has reportedly stopped touting ICOs because of threats against him by the SEC.
Musk Blaming Rogue Employee for Trouble Meeting Overambitious Goals?
Talk amongst yourselves. Elon Musk sent an email to Tesla (NASDAQ:TSLA) employees blaming a rogue employee who sent out sensitive information and might have started a fire a la Lybia. The employee was denied a promotion and blamed by Musk for sabotaging Tesla’s assembly line just before Tesla was about to maybe reach its Model 3 production goals, but now probably won’t, due to totally unforeseen factors that nobody could have possibly expected and everyone is really surprised. Tesla’s goal is to produce 5,000 Model 3’s per week, rain or sabotage.