The following from Bloomberg Intelligence's aerospace and defense analysts should help you understand why the stock market hates protectionism:
"Increasing incomes in the developing world and low fuel prices are boosting global demand for airliners. Boeing and Airbus gain most from this long-term trend...."Well, assuming Washington makes good on its promise this week to implement its latest tariff scheme, the developing world (read China) is about to be inspired by U.S. government officials -- of all people!!! -- to do its business with Airbus, the European airplane manufacturer. And who is it we're protecting again?
I'm utterly dumbfounded at the naivete of the President's main man on trade, Peter Navarro, per our close to this week's message:
"....I believe I read somewhere yesterday that Washington may focus specifically on China-produced technology -- which I don't suspect will provide much solace for the market, particularly the tech sector.Lastly, speaking of the folks in Washington, I have to wonder if -- as they attempt to pass a $1.3 trillion spending package (and we're talking just for the balance of this year) by Friday midnight -- they understand that China is the number one buyer of the treasury debt that they'll be issuing to fund this whopper of a spending spree. If China pulls back, which the U.S. is begging it to do at this point, do they ultimately risk higher interest rates as the treasury department attempts to attract other lenders? Well, does one and one make two?
The President's trade adviser Peter Navarro disagrees with that last sentence:
“I don’t think there’s anybody on Wall Street that will oppose cracking down on China’s theft of our intellectual property.”Wanna bet, Peter?"