Chinese Economy is “Crumbling” Says White House Economic Advisor

U.S. in better position on trade right now. “The Chinese economy is crumbling. It’s just not the powerhouse it was 20 years ago,” said White House Economic Advisor Larry Kudlow on Tuesday. With China’s economy growing at the slowest rate in 27 years, there is some merit to the claim. However, China, the world’s second-largest economy in the world, did show growth of 6.2 percent in the past quarter, far outpacing the United States. This latest dig follows China’s decision to devalue its currency against the U.S. dollar on Monday as part of the broader trade war. The implication is that the United ...
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Despite Rally, Technical Indicators Suggest Bigger Market Correction

Market rally damaged by recent events. The sharp drop in stocks over the past few weeks have sent markets down about six percent from all-time highs. While that perspective is helpful for fearful traders, chart analysts warn that markets will likely decline a bit more before rallying again. That’s because technical support levels—prices where traders are willing to buy in—have been breached, and lower levels likely have to be hit before markets bottom and rally again. Specifically, the S&P 500 index has broken down against its 50-day and 100-day moving average. Typically, the market is bullish when stocks are trading above that price ...
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Insider Activity: Arch Coal (ARCH)

Three directors make buys. On Friday, August 2nd, director Robert Hamill bought 1,000 shares of Arch Coal (ARCH), shelling out over $78,000 for the stake. He was joined by director James Chapman, who also bought 1,000 shares the same day at a slightly higher price. Both buys came a day after director Holly Koeppel bought 2,200 shares, paying over $195,000—and about 15 percent higher than where shares currently trade. These insider buys mark the first insider activity at the company since 2017, when prior insiders were sellers of shares. Arch Coal produces and sells thermal and metallurgical coal globally, primarily with the use of ...
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Unusual Options Activity: Nvidia (NVDA)

Traders bet on share rally in the next month. Many tech names took a steep dive on Monday on trade war fears. But traders were betting those would be short lived. One name that saw multiple options with unusual activity was Nvidia (NVDA), maker of advanced graphic processors. The August 30th $155 call was one of several options on the company that saw unusual trading, with over 1,580 shares trade against an open interest of 114, making for a 14-fold surge in volume. With shares of the company trading around $151 on Monday following a brutal 6 percent decline, the $155 calls would ...
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China Escalates Trade War With Yuan Devaluation

Weaker yuan makes U.S. dollar relatively stronger. Stocks posted their worst trading day of 2019 on Monday, as China allowed its currency, the yuan, to devalue under 7.05 per U.S. dollar, its lowest level in more than a decade. The move is to make the country’s currency weaker relative to the dollar, which gives it an advantage over other currencies in international trade. That makes the move a preemptive retaliatory strike against the increased tariffs proposed by President Trump scheduled to go into effect September 1st, and may even be a sign that China has given up on a trade deal with the ...
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Business Expectations Hit Record Low on Trade Uncertainty

Business growth continues to slow on rising uncertainty. Purchasing Managers’ Index (PMI) data for June showed a surprise rise, hitting 53, against a 51.5 read in June. This is the second month in a row that the data has shown economic growth. However, even as the hard numbers have shown a rise, business expectations hit a record low. This is the sixth month in a row for sliding confidence, reflecting the rising uncertainty in the economy throughout the year. Digging into the data, there’s still some growth, albeit slowing growth. Business activity fell to 53.1 against a read of 58.2 last month. New orders ...
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Jobs Growth Meets Expectations, Unemployment Still 3.7 Percent

Job growth continues, but slows. With markets focused on trade issues Friday, the July nonfarm payroll data came in, indicating that 164,000 jobs were added in the private sector. This matched expectations, and the unemployment rate remained unchanged at 3.7 percent. Job increases were notable in sectors such as healthcare, financial services, and professional and technical services—all areas where high-paying, full-time employment is the norm. Digging into the data, long-term unemployment—those unemployed for over 27 weeks or more, declined by 248,000 to 1.2 million. Long-term unemployed account for 19.2 percent of all unemployment. Short-term unemployment—those unemployed for less than 5 weeks, rose by 240,000 ...
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New Tariff Threats from U.S. Spur China Response

Country promises countermeasures following Trump tweet Thursday. Following a tweet from President Trump on Thursday indicating that an additional 10 percent tariff on $300 billion of Chinese imports to the U.S. would start on September 1, Chinese officials responded. Specifically, the country stated that it did not seek a trade war, but wasn’t afraid of fighting one. Countermeasures would be taken should tariff rates go up. This renewal of verbal hostility has sent markets sharply lower. Besides the tariff announcement itself, President Trump indicated that existing tariffs would be raised should Chinese officials continue to delay on a trade deal. The on-again, off-again ...
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