Market Morning: Stocks Try Again, Germany Fumes, and Nobody Wants a Fiat

After Fizzled Pre-Holiday Rally, Stocks Take Another Shot Higher

In the face of the official start to US tariffs against Chinese imports and general pre-Federal Reserve minutes release jitters, stock futures have spurted higher in an attempt to reverse the failed rally at the close on July 3rd that couldn’t push above the 50 day moving average. S&P 500 futures (NYSEARCA:SPY) are up just over 0.4%, and tech stocks are up with the Nasdaq (NASDAQ:QQQ) higher by 0.38%. China seems to be taking the impending tariffs a little tougher, now decisively in a bear market down 23% from highs on the Shanghai Index (000001.SS) after taking another near full percent dive today.

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Now the Germans Are Getting Angry

German Chancellor Angela Merkel had some tough words for the Trump Administration today, warning that imposing automobile tariffs against Europe’s economic car engine, double entendre intended, would have “dire consequences… It’s worth every effort to try and defuse this so that this conflict does not become a war.” Trump has threatened at 20% tariff on all imported European cars if the European Union does not remove its own trade barriers. To find out exactly what those trade barriers are, kindly refer to pages 139-184 of the report on trade barriers published by the United States Trade Representative. Page 185 is on Ghana, for anyone interested. Merkel is threatening $300B in US exports with even more trade barriers. Meanwhile, people that trade are caught in the crossfire.

Related Tickers: (DDAIF) (BMWYY) (VLKAY)

Speaking of Cars, Nobody Wants a Fiat

The company behind Chrysler, Dodge, and Jeep, is having serious trouble selling its name brand in the US. When you think of Fiat (FCAU) you think of tiny little cars that can fit through thin alleyways in dangerous car chase scenes being shot somewhere in Italy. Americans are not generally fans of these cars, especially not during times of economic expansion and relatively low gas prices, which have been rising since 2016 though. Fiat’s sales down 44% this year, and the brand name may cease to exist in the US if sales don’t turn around quickly. Fiat only came back to America when it acquired Chrysler, saving it from bankruptcy in 2009.

European Central Bank Signals More Rate Hikes

The ECB is reportedly slightly perturbed by its perception that markets are pricing in too few rate hikes, thinking that the first one will come by the summer of 2019 after the central bank stops its bond buying program in September. Signaling that the central bank wants to hike rates faster than the markets think that it actually will, Eurozone bonds responded by edging higher.

Novichok Poison Implicated In Hospitalization of Two Britons

Looks like Russia is going to get another tongue lashing from Great Britain again after a British couple was confirmed poisoned by Cold War era poison called Novichok. This happened near the site where former Russian agent Serkei Skripal and his daughter Yulia were poisoned in March. Russia is likely to deny any involvement and even if it was involved, this was likely an accident because the people seem to be random. Nevertheless, expect a war of words between British Prime Minister Theresa May and Russian President Vladimir Putin in the coming days.

Related tickers: (RSX) (ERUS)

 

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