Market Morning: Trump Grumpy on China, JCPenney Last Hurrah, US Sticks With Saudis

Trump Administration Says China Still Being Bad On Trade

Prepare for another round of trade war headlines. The United States Trade Representative (USTR) has come out with another report blaming China for all the problems revolving around trade between itself and the US. “This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation,” said Robert Lighthizer, the USTR in the flesh, who believes that the solution to solving this problem is to put up the same barriers in the United States that he complains the Chinese are putting up in China, and that this will somehow solve the problem. This couldn’t come at a worse time for the stock market, already flirting with bear market territory with investors increasingly on edge. Retailers beware. (NYSEARCA:XRT)

SEE: Remote Washington County Advocates for Inflated Electricity Prices for Crypto Miners 

Bitcoin, Tether, Again Under Investigation

The Department of Justice is snooping around the dealings of Bitcoin (BTC-USD) Bitfinex, a Hong Kong cryptocurrency exchange, and Tether (USDT-USD), a Hong Kong-based digital dollar-backed token. Bitfinex and Tether have the same senior management team, which is generating suspicion that Tether tokens were created, these unbacked by dollars, used to generate demand in Bitcoin, and then taken out of circulation, which is exactly what the Federal Reserve does with US Treasuries all the time and have done for over a century, but they’re allowed to do it and Bitfinex isn’t. It isn’t exactly clear if this is really a new part of an investigation and that the DoJ is supposedly closing in on something, or if these headlines are being recycled from old stories through redundant comments just to coincide with the current cryptocurrency collapse.

JCPenney’s Last Christmas?

Former Walmart CEO (NYSE:WMT) Bill Simon has some ominous words for JCPenney (NYSE:JCP). The embattled brick and mortar retailer could be in big trouble if it doesn’t hit a home run this holiday shopping season, which may or may not have to include Black Friday stampedes, though Simon did not comment on stampedes specifically. JCPenney’s only profitable quarter has been Q4, but not profitable enough to make up for losses in the other three, and this has been a repeating pattern for several years. The retailer lost $151 million last quarter. The bigger problem is that President Trump’s trade crusade is going to hit JCPenney hard if he follows through with tariffing every Chinese product, since much of JCPenney’s products come from there. The company is basically a “Penney Stock”, trading at $1.29 with a market cap below $500M.

Trump Sticks with Saudi Arabia, Despite Khashoggi Murder

“If we broke with them, I think your oil prices would go through the roof,” Bloomberg reports Trump told reporters Tuesday on his way to Florida to soak up some sun for Thanksgiving and escape the record cold. “It’s a very simple equation for me.” Sadly, he’s probably right, which may be a factor as to why oil plunged so drastically yesterday, down over 8% from top to bottom, the biggest one day plunge since the current downtrend from $76.90 began in early October. Let’s see what congress does regarding threatened sanctions. (NYSEARCA:USO)

Europe Up, Asia Mixed, Futures Higher

European stocks are marginally higher across the board, and Asia is mixed, with Japan down but most of the rest of Asia up, including China and Hong Kong. The Nasdaq looks to open about 1% higher as of early this morning, though that could change with the increasing volatility of late. Oil is up strongly after yesterday’s rout, precious metals higher as well, and US Treasury yields are up about 2.5 basis points this morning.

 

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