Stocks fell today after President Trump mentioned that the meeting with North Korea currently set for June 12th might not happen. What did happen today in North Korea was the arrival of 20 journalists from the US, China, and everywhere else but S. Korea to observe the shutdown on Thursday of the nuke test site at Mt. Mantap. We will see how this goes. Will Kim Jung get cold feet and bolt?
The Dow closed the day down 178 points to 24,834 on mixed trading volume. Bank and energy stocks continue to do well. The House on Tuesday is expected to pass regulatory relief for regional banks and Trump said he will immediately sign the bill into law. Several investment gurus are hinting that this legislation will boost the bottom lines of regional banks that have inadvertently been swept up in the regulatory net of “systemically important” mega banks like JP Morgan, Citi, Wells and B of A.
The trade situation between China and the US continues to unfold with few concrete details and a somewhat changing narrative. The US said that while it had put a hold on all tariffs of Chinese goods it will continue to keep tariffs on steel and aluminum. Steel stocks jumped on the news. Car makers also got a boost after China’s Finance Minister said auto tariffs would be reduced from 25% to around 14% starting on July 1st. Tariffs on car parts will also be lowered from 10% to 6%. The big winner in all this is Germany which has about 22% of the Chinese car market followed by Japan and then the US. Ford, GM and Fiat Chrysler will all benefit from this deal as will the Port of Aberdeen which is a major shipping point for US cars bound for Asia should China import more cars as a result.