April 25, 2019 02:17 AM RSS

China’s Xi Jinping Lets Trump Know His Nation is Capable of Counter-Punching …’In Our Culture, We Punch Back’

  • Wall Street Rebel | James DiGeorgia
  • 06/27/2018 1:20 PM
China’s Xi Jinping Lets Trump Know His Nation is Capable of Counter-Punching …’In Our Culture, We Punch Back’


President Trump loves to brag on his being a great counter puncher. Perhaps but speaking last Thursday to the Global CEO Council, a China-organized group of roughly 20 chief executives from mostly Western multinational companies such as Goldman Sachs and Volkswagen China’s Xi Jinping made it clear this week he will not hesitate to retaliate against the U.S. on trade, according to the Wall Street Journal…

‘In our culture, we punch back … and it wouldn’t be polite NOT to reciprocate in kind to punitive tariffs of our own.”

President Trump’s trade negotiation strategy is clearly one of intimidation and brinkmanship. He may well find out that like Justin Trudeau of Canada, the rest of the world may not be willing to be pushed around as Trump tries to impose his America First policy.

So far, there’s absolutely no trade talks underway to put an end to Trump’s world-wide trade war. Instead, Trump’s focus is on attacking companies like Harley Davidson who have begun to make it known that they will no longer suffer in silence if the escalating tariffs affect them.

Bloomberg Opinion’s Brooke Sutherland predicted on Thursday that Harley Davidson’s shift could be just the start of a migration of companies out of the United States.

Trump’s response to Harley Davidson was to literally threaten the iconic American company with much higher taxes and predict its doom …


[Picture: Trump Tweet Harley Davidson]

Trump and his administration appear to be feckless at this point; openly contradicting one another in interviews with the financial press.

Peter Navarro a top Trump Administration trade adviser, denied reports about the White House planning to limit Chinese investment and tech exports while Treasury Secretary Steven Mnuchin said plans for the new barriers for foreign investment were in the works, “not specific to China, but to all countries that are trying to steal our technology.”

Others in the Administration are warning Trump is seriously considering following through on his threats to slap new trade tariffs on cars imported to the United States.

Punitive Tariffs on autos would escalate Trump’s trade war by a factor of 10!

According to Donald Trump he wants to rescue the U.S. auto industry by slapping on tariffs of as much as 25% on foreign made cars imported into the United States. Trump wants to be able to claim on the campaign trail for the mid-term election that he is encouraging domestic investment and domestic centric automotive production to make the argument he is supporting U.S. workers. U.S. car makers however don’t want any part of Trump’s rescue idea.

Ford, General Motors and Fiat Chrysler are wary of what’s happening to other company’s caught in the middle of Trump’s trade war, such as Harley-Davidson. These companies as well as foreign brands are concerned the Trump’s tariffs will disrupt sales and hurt their bottom lines.

Unlike the steel and aluminum tariffs –where some companies, unions and lawmakers from both sides of the political divide offered support for protecting domestic producers the opposition to impose tariffs on cars – is almost universal.

“I can’t find a single company that is call for protection from international competition said John Bozzella, president and CEO of Global Automakers, a D.C.-based lobbying group.”

“I don’t see it. There’s isn’t a single company. And frankly, there isn’t a single group of employees that has called for this either.”

I was talking with Geoff Garbacz here at Wall Street Rebel who called me this morning to tell me that U.S. futures were down over night sharply as the market opened Wednesday in Asia.

Geoff wanted to point out that word from the White House that it wasn’t seriously considering going ahead with placing tariffs on foreign technology investment and the sutures reverse and the Dow was up this morning over 240 points.

I pointed out to Geoff that I didn’t doubt that White House assurances cannot be relied on if the past is any indication. The White House can change its policies during the same day, sometime more than on flip-flop in a matter of hours. Still Geoff’s observation and analysis of the market as of the close on Tuesday is correct, the major stock indexes are oversold. We’re likely to see a counter rally for a few days and get another optimal to recommend another round of S&P Put call options in our Options Index Trader  service. We just took profits of 34.35% in little more than 20 days.

So far in 2018, we have been doing one trade a month. Not as much as we want to but the batting average and return is just fine.

 

This year we have booked five winners and taken one loser. Statistically, we were due to get a trade wrong. Five winners and one loser is an 83% batting average. Our historical batting average is 79%!

 

The total return in 2018 is 105.20%. So the per trade return is 17.53% and the average winner is 21.04%. Expect to see us pick up the action in July as volatility appears to be on as we move from spring to summer trading.

 

Trading will be concentrated on Equity Index ETFs like SPY, IWM, and QQQ. Also, we may play the bond market via TLT as interest rates have been volatile this year when compared to 2017.

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