The Washington Post - 07.08.2019

A20 EZ RE THE WASHINGTON POST.WEDNESDAY, AUGUST 7 , 2019

THE MARKETS

6 M onitor your investments at washingtonpost.com/markets Data and graphics by

Note: Bank prime is from 10 major banks. Federal Funds rate is the market rate, which can vary from the federal

target rate. LIBOR is the London Interbank Offered Rate. Consumer rates are from Bankrate. All figures as of

4:30 p.m. New York time.

1.

1.5 2

1.

1.

10- year note

Yield:

5-year note

Yield:

2-year note

Yield:

6-month bill

Yield:

Treasury Performance Over Past Three Months

7833 .27 +1.4 +18.

2881.77 +1.3 +15.

26,029.52 +1.2 +11.

Daily Stock Market Performance

Daily

Index Close % Chg

YTD

% Chg

Nasdaq Composite Index

Dow Jones Industrial Average

S&P 500 Index

3100

2850

2600

2350

A JJMAMFJDNOS

8400

7800

7200

6600

6000

27,

26,

24,

23,

21,

Industry Group

Daily

% Chg

Daily

% Chg –4.0%^0 +4.0%

Construction & Engineerng 3. 03

Personal Products 2.

Aerospace & Defense 2.

Life Sciences 2.

Electrical Equipment 2.

Chemicals –0.

Energy Equipment & Svcs –1.

Water Utilities –1.

Power Prodct & Enrgy Trdr –1.

Wireless Telecomm Svcs –1.

S&P 500 Industry Group Snapshot

Ba nk Prime

Federal Funds

LIBOR 3-Month

30-Year fixed mortgage

15-Year fixed mortgage

1-Year ARM

2.21%

2.25%

5.25%

3.64%

3.10%

3.77%

Money market funds

6-Month CDs

1-Year CDs

5-Year CDs

New car loan

Home-equity loan

Consumer Rates

0.

0.

1.

1.

4.

6.

Interest Rates

Index Close Daily % Chg YTD % Chg

DJ Total Stock Market Index 29,583.19 1.3 15.

Russell 2000 1502.09 1.0 11.

Post-Bloomberg DC Area Index 602.21 1.8 28.

CBOE Volatility (VIX) 20.21 –17.8 –20.

Other Measures

Europe

Americas

Asia Pacific

Brazil (Bovespa)

Canada (S&P/TSX Comp.)

Mexico (Bolsa)

Eurozone (DJ Stoxx 600)

France (CAC 40)

Germany (DAX)

U.K. (FTSE 100)

Australia (ASX 200)

China (CSI 300)

Hong Kong (Hang Seng)

Japan (Nikkei)

Close

Daily

% Chg

YTD % Chg

–25% 0% +25%

102 ,163.70 2.

1 6,149.49 –0.

3 9,803.24 0.

3 67.71 –0.

523 4.65 –0.

1 1,567. 96 –0.

7 171.69 –0.

647 8.09 –2.

363 6.33 –1.

2 5,976.24 –0.

2 0,585.31 –0.

International Stock Markets

Daily

Close % Chg

Daily

Gainers Losers Close % Chg

Inva care Corp $5.62 34.

Adient PLC $ 25 .45 31.

Shake Shack Inc $86.72 1 8.

Pitney Bowes Inc $4.16 17.

Itron Inc $67. 86 1 7. 1

Colfax Corp $28.45 15.

Vonage Holdings $13.43 14.

Comty Health Sys $2. 19 14.

TransDigm Group Inc $5 24 .39 13.

Haemonetics Corp $131.24 12.

Veeco Instruments $12.27 12.

WPX Energy Inc $9.91 11.

Syneos Health Inc $51. 65 1 0.

LGI Homes Inc $75.10 1 0.

Veritiv Corp $15.58 9.

Innophos Holdings $26.51 9.

MTS Systems Corp $61.43 9.

AMAG Pharma $9.72 9.

Frontier Comm $1.23 8.

Ta ilored Brands Inc $4.90 8.

Dean Foods $1.06 –36.

Care.com Inc $7.73 –24.

Endo International $2.25 –21.

New Media Invst $8.05 –18.

Intl Flavors $118.91 –15.

Energizer Holdings $33.49 –14.

Mallinckrodt PLC $5.70 –12.

Cars.com Inc $10.40 –12.

Chesapeake Energy $1.39 –10.

Ta ctile Sys Tech $49.30 –10.

Cohu Inc $12. 98 –9.

Shutterstock Inc $34.37 –8.

Laredo Petroleum $2.58 –8.

Whiting Petroleum $9.79 –8.

Gannett Co Inc $10.20 –7. 6

MGP Ingredients Inc $50.70 –7. 2

LiveRamp Holdings $45.68 –7.

Range Resources $4.31 –7.

LA-Pacific $23. 10 –6.

Mosaic Co $22. 02 –6.

Gainers and Losers from the S&P 1500 Index

Daily

% Chg

YTD

Company Close % Chg

Daily

% Chg

YTD

Company Close % Chg

3M Co 163.71 –0.6 –14.

AmExp 122.55 1.5 28.

Apple Inc 197.00 1.9 24.

Boeing 332.45 0.4 3.

Caterpillar 122.08 0.4 –3.

Chevron Corp 119.38 0.5 9.

Cisco Systems 52.60 2.4 21.

Coca-Cola 52.27 1.2 10.

Dow Inc 44.43 –0.

Exxon Mobil 70.96 1.0 4.

GoldmnSchs 206.01 2.1 23.

Home Depot 208.80 1.9 21.

IBM 140.73 0.0 23.

Intel Corp 46.96 0.0 0.

J&J 130.77 0.5 1.

JPMorg Ch 110.43 0.8 13.

McDonald's 214.08 1.7 20.

Merck 84.35 1.5 10.

Microsoft 134.69 1.9 32.

Nike 81.30 3.0 9.

P&G Co 114.28 1.1 24.

Pfizer Inc 36.95 0.0 –15.

Travelers 145.96 1.4 21.

United Tech 128.80 2.4 21.

UnitedHealth 248.28 1.3 –0.

Verizon 55.05 –0.3 –2.

Visa Inc 172.48 2.1 30.

Walgreen 51.45 –0.8 –24.

WalMart 107.27 1.4 15.

Walt Disney 141.87 2.6 29.

Dow Jones 30 Industrials

Brazil R$ per

EU €per

Japan ¥ per

US $ per

Canada $ per

Mexico $ per

Britain £ per

US $ EU € Japan ¥ Britain £ Brazil R$ Canada $Mexico $

1.1203 0.0093 1.2164 0.2526 0.7533 0.

0 .8926 0 .0084 1.0858 0 .2254 0.6724 0.

1 06.4900 119.2900 1 29.5270 26.8954 80.2130 5.

0 .8220 0.9209 0.0077 0 .2077 0.6193 0.

3 .9594 4.4358 0.0371 4.8160 2 .9825 0.

1 .3276 1.4872 0.0124 1.6148 0.3353 0.

1 9.5744 21.9276 0.1840 23.8094 4.9440 14.

Cross Currency Rates

Exchange-Traded (Ticker) $

Daily

% Chg

Value of $1000 invested for the past: day month

$800 $

Co ffee (COFF.L) 1.

Copper (COPA.L) 0.

Corn (CORN.L) –0.

Cotton (COTN.L) –0.

Crude Oil (CRUD.L) –1.

Gasoline (UGAS.L) –1.

Gold (BULL.L) 0.

Natural Gas (NGAS.L) 1.

Silver (SLVR.L) 1.

Futures

Daily

Close % Chg

Daily

Close % Chg

Copper $2.5 575 +0.

Corn $4.125 0 –0.

Crude Oil $53. 63 –1.

Gold $1, 48 4.2 0 +0.

Natural Gas $2.11 +2.

Orange Juice $1. 0290 +4.

Silver $16.45 +0.

Soybeans $8.657 5 –0.

Sugar $0.1173 –0.

Wheat $4.84 00 –2.

Commodities

BY HEATHER LONG

The world’s two largest econo-
mies are now in a full-blown
trade — and c urrency — war, and
the dire warnings are piling up.
The stock market had its worst
day of the year on Monday. The
bond market is signaling a com-
ing recession. And prominent
voices are calling this a danger-
ous moment.
“We may well be at the most
dangerous financial moment
since the 2009 Financial Crisis
with current developments be-
tween the U.S. and China,” t weet-
ed Larry Summers, a U. S. treas-
ury secretary under President
Bill Clinton.
Allen Sinai, a noted forecaster
and chief economist at Decision
Economics, told my colleague
Jeff Stein: “This is a big policy
mistake. We get recession be-
cause of policy mistakes like
this.”
Even some Republicans are
breaking ranks to express con-
cern. “The tariffs placed on Chi-
nese goods are now starting to
bite into U.S. economic growth
and prosperity,” Henry Paulson,
the treasury secretary under
President George W. Bush, said
in a statement.

So how concerned should you

be? President Trump’s trade war

has been underway since Janu-

ary 2018. What’s different in the

past week is that there is now no

end in sight to this fight, espe-

cially between the United States

and China.

The hopeful narrative that

many on Wall Street had this

spring — that Trump and Chi-

nese President Xi Jinping would

sign a deal soon — is gone.

Trump pushed more tariffs, and

China has shown it is willing to

punch back. The consensus view

now is: It’s going to get worse

before it gets better.

As this conflict escalates, it is

likely to w eigh m ore and more on

the stock market and the econo-

my. After a rough few days, the

stock market is back at the same

level it was in January 2018 (i.e.,

the level before Trump put his

first tariff on washing machines

and solar panels). That’s a pretty

clear signal from Wall Street that

investors think tariffs have

wiped out some of the benefits of

the tax cuts and are dragging

down prospects for future

growth.

Is a recession coming? Ex-

perts were predicting that the

U. S. economy would grow 2 to

2.5 p ercent this year — a good b ut

not spectacular pace. Most of

this growth is coming from con-

sumer spending. The key ques-

tion is whether the trade war is

going to dampen consumer

spending. Businesses have al-

ready pulled back on their

spending.

Will consumers follow? That’s

the big unknown.

Trump is taking a gamble if he

does end up putting a 10 percent

tariff on $300 billion more of

imports from China in Septem-

ber. This time around, the tariffs

are mostly hitting popular items

including laptops, iPhones,

shoes and baby products, such as

strollers. And these taxes are

hitting just before the peak holi-

day shopping season.

So far, consumers remain fair-

ly optimistic, according to close-

ly watched surveys from the

University of Michigan and the

Conference Board, but that can

change quickly. Remember De-

cember, when the market sank

and came extremely close to

entering bear territory? That

plus the government shutdown

sent consumer sentiment (and

spending) down for a few weeks.

Now Trump is taking another

risk — and he’s doing it as the

U. S. economy is slowing, making

the s takes higher than a year a go.

Why is this happening? The

headlines this week are about a

“currency war.” China had been

propping up its currency in re-

cent years to keep it trading at a

stronger pace than 7 yuan to the

dollar. On Monday, China al-

lowed the yuan to weaken to its

lowest level in more than a

decade. From a numbers per-

spective, it wasn’t that dramatic.

The yuan traded at 7.0391 to the

dollar vs. about 6.9 the day

before. But from a symbolism

perspective, it was huge.

China was signaling to Trump

that it is ready to fight and will

use all the tools of a centrally

planned economy to do so. The

United States fired back by label-

ing China a “currency manipula-

tor,” something that hasn’t been

done since 1994 but which

Trump promised on the cam-

paign trail he would do.

The move by Trump is mostly

symbolic. Under U.S. law, label-

ing a country a currency manipu-

lator means the two nations are

supposed to talk about it for at

least a year. After that, the Unit-

ed States can take countermea-

sures, but they are pretty weak.

China already parried by stabi-

lizing its currency Tuesday at a

level just shy of 7 (6.9683 to be

exact), a signal that Chinese

leaders think they have made

their point, at least for now.

There’s a chance Trump might

try to devalue the U. S. dollar, but

the reality is the United States

has a lot fewer reserves than

China to play these kinds of

currency games on a large scale.

The cheaper yuan also helps

Trump because it mutes the

impact of his tariffs. L aptops and

shoes from China won’t be

10 percent more expensive this

holiday season if China keeps its

currency low.

The bigger blow from the

Chinese was a statement that

they will halt agricultural pur-

chases from the United States,

which will cause immediate pain

for farmers who are already

hurting.

What’s next? There are three

things to watch from here. First,

what does Trump tweet? He

started off Tuesday by praising

the U.S. economy, tame tweets

that helped calm Wall Street.

Second, do U.S. and Chinese

negotiators talk or meet in the

coming weeks? They are sup-

posed to meet in September. If

that is scrapped, it’s not a good

sign.

Finally, keep a close eye on

signs that companies are stop-

ping their hiring or that consum-

ers are becoming spooked. The

U. S. economy is already cooling

(to a bout a 2 percent growth pace

this year vs. 2.9 percent last

year). If companies stop hiring,

that is likely to cause consumers

(and investors) to think this

record-breaking expansion is

about to end. That moment isn’t

here yet, but Trump is risking it

in the months before a critical

reelection campaign.

[email protected]

ANALYSIS

Is the U.S.-China trade war the ‘most dangerous’ financial time since ’09?

“We may well be at

the most dangerous

financial moment since

the 2009 Financial

Crisis with current

developments.”

Larry Summers,

former treasury secretary,

in a tweet

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