Stocks continued to face selling pressure in a shortened pre-Christmas trading session. While CNBC noted that investors were “flocking to gold and cash”, IBD showed that trading volume was lower than a Prius in an underground parking garage as traders bolted for the Hamptons and a glass of eggnog to sooth the tortured soul. In reading various reports, Investors like Jim Paulson and David Tepper are now eye balling going long cheap stocks while Cramer is flummoxed and looking at gold. Comments on Seeking Alpha indicate that while gurus acknowledge the fundamentals, they are concerned over slowing global growth rates and uncertainty related to the Fed reducing its balance sheet while trying to raise interest rates at the same time. At the close the Dow had its worst pre-Christmas trading day ever falling 653 points to 21,792. Ugh! I wish I had purchased those Kingdom of God bonds! You know….the ones that pay 15%, never lose value and are tax free!
GasBuddy reported that almost one in five gas stations across the land are now charging less than $2 a gallon for gasoline. The US Dept of Energy noted that the average price of gas was just below $2.40 a gallon. Oil prices meanwhile continue to slip and WTI crude today fell 3.5% to just under $44 a barrel. Natural gas prices are also dropping. While this is good for consumers it raises fears of slowing global economic growth.
The South China Morning Post is reporting that Beijing is easing tariffs on 700 items and considering legislation to protect intellectual property rights and end “forced technology transfers”. The legislation was first proposed in 2015 but never came to fruition and now is being pulled out and dusted off as China knows the world is growing weary of China techno piracy. On an interesting note, I attended a meeting with Troop 100 alumni and one of the kids I hiked with and who is also an Eagle Scout, now works in Washington DC on trade policy. We had a great conversation and he said that working on trade has been challenging but is needed since China has been stepping out of bounds far too long. What is hard for China is that changing their culture of entrenched piracy is not easy. He also noted that tariffs are hurting some US companies that make stuff in China and then import them back to the US. He said there are lots of gubment and business groups working of the issue. It gave me hope knowing that a Troop 100 lunkhead is on the job!