D&D Note (3.1.2018) ~ Trade War ~

D&D Note (3.1.2018) ~ Trade War ~

On what was supposed to be a day highlighted by the FED in front of the Senate, instead we got a bombshell from the POTUS. The administration is going to impose new tariffs on imported steel at 25% and imported aluminum at 10%. One could say we are now in a Trade War.

Markets had seen a pop after Chair Powell clarified comments from Tuesday on an overheated economy. Then the White House announced the new tariffs and the markets immediately fell apart. The DOW fell -420 points, the S&P fell -36 points, the NASDAQ fell -92 points, the Russell fell -5 points, and the VIX spiked over 10%.

Protectionist Tariffs are seen as inflationary which caused the reversal in the markets. The Bond Market however acted in opposite seeing yields fall with the 10YR yield at 2.815%.

Republican Ben Sasse from Nebraska weighed in on the news saying Trump was proposing “a massive tax increase on American Families. You’d expect a policy this bad from a leftist administration, not a supposedly Republican one.”

Investors much watch the 100day moving average on the major indices. The S&P trading through and then bounced to close just off the 100day MA. The DOW trading to the 100day MA and bounced to close slightly above. And the Nasdaq traded through and bounced off the 50day MA to close just above.

If we break through the 100day we will most likely retest the 200day moving average again before resuming the bull push higher.

The Gunmaker American Outdoor Brands (Smith & Wesson) crashed 20% after sales fell 32.6% year over year.

The National Security Advisor HR McMaster is said to be exiting the administration following yesterdays announcement of the Director of Communications leaving.

The D&D generals APHQF and TWMJF again led the day pulling our portfolio into the green on the day by 0.40%. We added to our position in EMHTF to readjust our cost basis down in the holding after the equity traded below the 100day moving average and then today closed above the 100day and our retracement level of $4.07.

We continue to keep an eye on BA, BRK.B, HON, SIEGY, ITW to add to positions on weakness. And materials sector stock PKG to further diversify our overall portfolio. Other stocks on our watch list to add to positions on weakness are; AAPL, TSM, DIS. We also continue to like financials and could look to add to our holding of JPM on further price correction.

D&D movers:

– TWMJF up 9.52%

– APHQF up 5.05%

– EMHTF up 4.84%

– CNTTF up 2.39%

– NVDA down -4.05%

– BA down -3.46%

– GOOG down -3.19%

– BRK.B down -2.74%

Indexes

– DOW down -1.68%

– NASDAQ down -1.27%

– S&P down -1.33%

Sector Movers:

– No sector finished higher on the day

– Industrials down -1.92%

– Financials down -1.85%

– Technology down -1.70%

Notes

– US 2-YR 2.222% (down -0.04)

– US 10-YR 2.815% (down -0.053)

– US 30-YR 3.097% (down -0.031)

Volatility

– VIX 22.15 (up 11.59%)

Crypto (1:00 PST)

– BTC $11,034.56

– ETH $876.00

– BCH $1,295.00

– LTC $213.50

Metals

– Gold $1,317.40 down -0.04%

– Silver $16.49 up 0.51%

– Copper $3.125 down -0.24%

Energy

– Oil $61.33 down -0.50%

– Brent $64.19 down -0.83%

– Nat Gas $2.696 up 1.09%