Market Morning: JD Down, Nike Backlash, EM Currencies Slaughtered, Oil Past $70 With Hurricane In Gulf

 

Futures Down, Trade War Again

Talks with Canada about a new NAFTA-type deal have broken down, and a public comment period on a proposed $200B in additional tariffs against China is coming to an end on September 5th, setting the stage for an enormous tariff burden to be shouldered by US consumers as inflation has already started to heat up. New tariffs against Chinese imports are expected to take effect later this month, with unclear consequences. Futures were higher overnight, but have since slumped down. The S&P 500 (NYSEARCA:SPY) is set to open slightly lower, with the Dow Jones (NYSEARCA:DIA) down about 0.3%.

SEE: China Focused On Blockchain Innovations As Patent Filings Surge

With Oil Over $70, Tropical Storm Gordon Heads For Gulf Coast

It’s not a huge storm but it is expected to hit the gulf coast as a category 1 hurricane, just as oil (NYSEARCA:USO) surpasses $70 a barrel, up about 2% today. The gulf coast is lined with oil infrastructure and refineries, which means price of oil could go down temporarily as refining is disrupted and an excess of crude results. Gasoline prices should head higher this week if the storm is strong enough to cause serious damage. Gasoline prices jumped 20% back in August 2017 on the back of Hurricane Harvey, which hit Texas. Compared to Harvey though, Gordon is a pussycat, but the impact could be telling in terms of the resiliency of energy markets in the US.

JD To the Woodshed After CEO Gets #MeToo’ed

JD.com (NASDAQ:JD) is down 4% this morning after traders had a chance to react to the news that CEO Richard Liu was arrested in Minneapolis under suspicion of sexual misconduct. His lawyer believes that Liu will not be charged, however, and that his client did nothing wrong. Liu runs the company with an iron fist, holding 80% of the shareholder voting rights, meaning JD is very dependent on his health and availability, and lack of being stuck in prison. JD is China’s biggest retailer behind Alibaba (NASDAQ:BABA) whose CEO Jack Ma has so far stayed out of any prison controversy.

Emerging Market Currencies Continue Epic Collapse

The Turkish Lira, South African Rand, Argentine Peso, Indonesian Rupiah, Indian Rupee, Russian Ruble, and other assorted emerging market currencies including the Chinese Yuan, are all down against the dollar in what looks like a mad rush to the exits from any emerging market currency. The phenomenon has been compared to the Asian crisis of 1998. Argentina for one has finally actually cut some serious government spending, eliminating half of its government ministries. On the negative side, it has raised taxes on imports in a self-defeating attempt to water down demand for dollars, which will only hurt its own people.

Related Tickers: (NYSEARCA:EEM)

Nike Gets Hammered Over Kaepernick Controversy

Colin Kaepernick, the lanky former NFL quarterback with the afro and a propensity to kneel during the Star Spangled Banner, is now the face of Nike’s (NYSE:NKE) new advertising campaign celebrating the 30th anniversary of its iconic slogan, “Just Do It.” Backlash on social media has come in the form of hashtags saying “Just Burn It”, referring to Nike paraphernalia, and other pyrocentric protest memes. Nike is down 2% this morning on the backlash, but isn’t backing down from its deal with the QB. If they do back down, it would be pretty ironic, since the ad campaign features Kaepernick in a full-fledged bushy afro, with the phrase, “Believe in something. Even if it means sacrificing everything.” Let’s see how much Nike is willing to sacrifice, or if the very short attention span of social media will grab on to the next hashtag sometime in the next few minutes instead.

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