Geopolitical risk reared its ugly head when both the House and Senate passed a veto proof measure supporting democracy protesters in Hong Kong. Only one guy in the house voted against the bill which now goes to the President’s desk for signing. Stock market gurus are worried it will spark negative reactions from China and muck up trade talks. The Dow closed off 54 at 27,766 on lighter trading volume.
While the developments with the Hong Kong legislation could derail a trade deal between the US and China the negative effects will most likely be felt more by China than the US. China’s economy has been slowing and the country has had to tighten capital rules and support industries losing money while supply chains leave. Plus an ever-increasing number of private firms have missed debt payments according to the South China Morning Post. Meanwhile the US has a strong consumer gearing up for Christmas plus Lipper noted that a record $3.41 trillion smackers sits in US money markets which is dry powder to buy stocks if there is a pullback. Stay tuned!
Tesla unveils its “cyberpunk truck” tonight in a much-anticipated attempt to enter the US truck market. The expectations are that the Tesla truck will sell for under $50k and be in production sometime between 2021 and 2022. This could make it competitive with the Ford, Toyota and Dodge off road sport models like the Raptor series which sell for $60k. Ford has already invested in electric truck company Rivian which has come out with an impressive but expensive truck.