Stocks were lower today as tariffs went into effect on $200 billion of Chinese imports while China responded with tariffs on $60 billion of US imports. The two sides are apparently not talking, and uncertainty continues to surround the issue. Big importers of “stuff made in China” like Walmart are worried while recent surveys of US businesses show a 50% approval of tariffs. At the close the Dow was off 181 points on low trading volume to finish the day at 26,562. The NASDAQ opened the day lower but then finished up thanks to a jump in Netflix. Medical and energy stocks also finished higher.
Shares of GE hit a 52-week low after the company was downgraded by several analysts in light of a recent “issue” with GE’s top of the line 7HA gas turbine. As utilities switch from coal to natural gas, GE’s power unit has been selling gas turbines like hotcakes. They have orders for 81 top of the line 7HA’s the first of which was installed in France in 2016. There are now 30 that have been installed and last week in Texas during routine maintenance, an issue was discovered which required Exelon to shut down the Colorado power plant in Texas while GE personnel fixed the 7HA turbine. The 7HA is the most efficient gas turbine on the market and GE is facing a financial hit as it will have to go through the installed base and make repairs.
OPEC and Russia announced they would not immediately increase oil production, and this news sent oil prices higher. WTI crude traded up 2.2% to $72.33 per barrel. JP Morgan is now predicting a price spike to $76 per barrel for WTI crude as US sanctions could hit Iranian exports in the coming months.