Market plunges | Trump says get out of China | Xi the 'enemy?'

FRI, AUG 23, 2019

EVENING BRIEF

AS OF FRI, AUG 23, 2019 • 04:01 ET

DJIA		25630.52
		-2.37%	-621.72

S&P 500		2847.46
		-2.58%	-75.49

NASDAQ		7751.77
		-3.00%	-239.62

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	202.64	-9.82	-4.62%
MSFT	133.39	-4.39	-3.19%
INTC	44.96	-1.82	-3.89%

S&P 500
NAME	LAST	CHG	%CHG
GE	7.97	-0.22	-2.69%
AMD	29.54	-2.36	-7.40%
BAC	26.47	-0.72	-2.65%

NASDAQ
NAME	LAST	CHG	%CHG
AMD	29.54	-2.36	-7.40%
AAPL	202.64	-9.82	-4.62%
MSFT	133.39	-4.39	-3.19%

EDITOR'S NOTE

Federal Reserve Chairman Jerome Powell breezed through his high-stakes speech today without so much as rippling the markets, but then came President Trump's response.

Trump's tweet ordering U.S. companies to look for alternatives to China sent the Dow plunging.

Earlier in the day, China had announced tariffs on $75 billion worth of U.S. goods and resumed duties on U.S. automobiles. The market had largely shrugged off this salvo until Trump amped up his rhetoric in response.

For his part, Powell took the podium at the central bank's annual conference in Jackson Hole, Wyo., under extreme pressure to promise something. But he only promised the Fed would act as appropriate to market conditions to keep the aging U.S. economic expansion alive.

It was an even-keeled and predictable speech, and it proved Powell could punt, even if he may not be able to putt, as Trump had complained in a tweet earlier in the week.

Trump has been setting up the Fed as a scapegoat for whatever happens to the U.S. economy as he continues swapping tariffs with China. But markets reacted positively to Powell, despite an expectation that he might disappoint.

"The speech was rather short and uncontroversial," wrote J.P. Morgan's Michael Feroli in a note to investors.

But Trump's reaction to both Powell and China was not. And it signaled that he is nowhere near a negotiated trade agreement or even another truce with China.

Any U.S. business in China, or doing business with China, has got to be thinking about their supply chains – regardless of whether Trump actually has the authority to order them out. And anyone dreading a recession has more to fear.

Yet, for all anyone knows, Trump's extremes could moderate with another tweet. Uncertainty floods the world with his every keystroke. What is the Fed to do?

"This is metastasizing," wrote Mark Zandi, chief economist Moody's Analytics. "Businesses of all stripes have to be nervous about this."

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