New York Post, Tuesday, August 6, 2019nypost.com
By CARLETON ENGLISHStocks went into melt-
down mode Monday — suf-
fering their worst day of the
year as China retaliated
against President Trump’s
recent tariff threats.
The Dow Jones industrial
average plunged by more
than 950 points in afternoon
trading as China delivered a
one-two punch to the US —
first by allowing its currency
to sink to an 11-year low
against the US dollar, and
then by halting imports of
US crops.
The blue-chip index
closed down 767.27 points —
or 2.9 percent — at 25,717.74
— marking its steepest drop
of the year on a points basis,
and the sixth-biggest drop in
the Dow’s 123-year history,
also based on points fallen.
The S&P 500 and the Nas-
daq followed suit and suf-
fered their worst drops of
2019, with the S&P closing
down 2.98 percent, to
2,844.75, and the Nasdaq
ending the day off 3.47 per-
cent, at 7,726.04.
Monday’s sell-off was
spurred by China allowing
the yuan to fall below the 7-
per-dollar level for the first
time in more than a decade
— a move that makes Chi-
nese imports cheaper and
arguably gives them an un-
fair trade advantage.
“It’s called ‘currency ma-
nipulation,’ ” Trump said in
a tweet Monday. “Are youlistening Federal Reserve?
This is a major violation
which will greatly weaken
China over time!”
The 1.4 percent drop in the
yuan comes just days after
Trump angered China with
plans to tax $300 billion of
Chinese imports at 10 per-cent starting next month.
China made the moves in
an effort to show that it, too,
has financial ammunition in
the burgeoning trade battle,
experts said.
“They can make it much
more difficult for US com-
panies to sell goods andservices in China,” Quincy
Krosby, chief market strate-
gist at Prudential Financial,
told The Post.
Indeed, adding to rising
tensions Monday, China’s
Commerce Ministry said
that Chinese companies
have stopped buying UScrops — and that the nation
could impose farm tariffs
next.
“Any hopes of a quick res-
olution with China are fad-
ing quickly,” Ryan Detrick,
senior market strategist at
LPL Financial, said Monday.
Apple, which makes its
popular iPhone in China,
was one of the weakest
stocks in the Dow, falling
more than 5.2 percent to
close at $193.34 a share. Cat-
erpillar and Boeing, which
both rely heavily on busi-
ness in China, saw their
shares fall 2.3 percent and
2.5 percent, respectively, on
renewed trade tensions.
After the markets closed,
Trump’s Treasury Secretary
Steve Mnuchin officially la-
beled China a currency ma-
nipulator. The designation
carries no immediate pun-
ishment but could rattle
markets further on Tuesday.
The Dow’s worst point
drop was 18 months ago
when the Dow fell 1,175.21
points on Feb. 5, 2018. At the
time, traders worried massive
stock gains and higher-than-
expected wage growth would
force the Federal Reserve to
hike rates to prevent the
economy from overheating.
Now the market finds it-
self in a different dynamic,
with the Fed cutting rates to
maintain the economic ex-
pansion and the US deeply
embroiled in spats with its
trading partners.
[email protected]By RICHARD MORGANThe Trump-China trade war has
been bad for stocks — but good for
bitcoin.
Turmoil in global stock markets
pushed the price of the controversial
digital coin up more than 8 percent
Wednesday, as a falling yuan sent
Chinese investors fleeing, according
to experts.That’s because bitcoin, which touts
itself as a global currency, is viewed by
many Asian investors as a safe haven.
Gold, the original safe haven, also
rose on renewed tariff fears, gaining
1.6 percent, to $1,462.30 per ounce, ac-
cording to precious-metals data pro-
vider Kitco Metals.
The price gains came as China let
its currency cross the psychological
threshold of 7 yuan to the dollar, pro-ducing an 11-year low that prompted
Trump to accuse Beijing of manipu-
lating its currency amid an escalating
trade war.
Michael Novogratz, the former
Fortress Investment Group principal
who founded cryptocurrency invest-
ment firm Galaxy Digital, predicted
the global unrest would extend this
year’s bitcoin rally.
“$Btc rally could have real legs,” hetweeted on Monday, citing a foreign-
exchange war, instability in Hong
Kong and “the beginnings of capital
flight.”
Gun stocks also posted early gains
on Monday after the weekend’s tragic
massacres in Texas and Ohio had ma-
cabre investors anticipating a rush by
consumers to buy firearms ahead of
calls for stricter gun laws.
[email protected]Building a ‘Wall’
HERE ARE THE LOW LIGHTS:
n China’s yuan in free fall
n Treasury cites ‘currency manipulation’
n Suspension of US crop importsChinese
President Xi
Jinping is going
toe-to-toe with
President Trump
in the trade war,
and US stocks
got socked in
the process on
Monday.Bitcoin bolstered by tariff turmoil
SHOT ACROSS DOW
China’s trade war salvo ignites huge sell-off
Post photo compositeBusiness
Ride to prison
UAW executive Nor-
wood Jewell received on
Monday a sentence of 15
months in federal prison
for misusing funds in-
tended for worker train-
ing — instead spending
the money on luxury
travel and entertainment
for himself and other
union officials.This disturbs
Marriott International
reported a 2 percent
drop in quarterly reve-
nue due to slowing
global economic growth.
Shares lost 4.2 percent,
closing at $130.34.Lingerie loser
Victoria’s Secret’s
longtime chief market-
ing officer, Edward
Razek, will step down, as
parent L Brands faces
backlash from consum-
ers about the lingerie
unit’s emphasizing pad-
ded bras and images of
busty supermodels.Bill bails out
Bill Ackman said that
he exited stakes in ADP
and United Technolo-
gies. His Pershing
Square fund has a new,
undisclosed position
representing 12 percent
o f NAV.Waist not
Mexican state-owned
oil giant Pemex will be-
gin offering bonuses of
$287 to employees who
meet personal weight
standards — including a
waist of no more than 31
inches for women, 35
inches for men,
Bloomberg reported.Sources: AP, Dow Jones,
Reuters and Post wiresBUSINESS
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