FYI: Like thieves who create a distraction to mask their crime, the bond market’s brief selloff last week drew attention away from what might be the real issue: U.S. trade relations.
When the S&P 500 dipped 0.1% this past Wednesday—ending a streak of six record highs to start the year—turmoil in the bond market was blamed. And for good reason. Japan, for one, was thought to be reducing some of its bond purchases, and Bloomberg reported that China was considering halting its Treasury purchases. Ten-year Treasury yields jumped as high as 2.6%, and their rise was blamed for the market losses.
Overlooked by some amid the bond apocalypse that wasn’t were reports that President Donald Trump was preparing to exit the North American Free Trade Agreement. But it wasn’t lost on the shares of companies with exposure to Mexico and Canada. Auto companies like General Motors (GM) and railroads like Kansas City Southern (KSU) suffered painful selloffs.
Regards,
Ted
http://www.cetusnews.com/business/Navigating-the-Trade-Wars.SktC_QMf7v4z.html
