Good day,
As far as investors are concerned, the trade war is effectively back on. Stocks sank on Tuesday as President Trump threatened China with further tariffs, just days after the two countries agreed to a 90-day ceasefire in their escalating economic conflict. The S&P 500 lost more than 3%, after rallying the day before on news of a deal with China. Referring to himself as a “Tariff Man,” Trump, in a series of tweets, increased anxiety and confusion surrounding the trade agreement, while members of his economic team also mitigated expectations of a broad deal. Many fear a lasting trade war will undermine the global growth at a time when some of the world’s largest economies are already showing signs of slowing down. The global and domestic worries are undercutting the prospects for manufacturers, technology companies, regional banks and airlines, intensifying the stock sell-off.
Did you know?
Dry bulk carriers are among those companies most exposed to tariff shocks, as barriers to international trade, especially the trade of agricultural products, depresses commodity values and alters lanes.
Quotable:
“We are merely entering the next phase of what will be an enduring economic competition between the world’s two largest economies.”
—John Lee, senior fellow at the Hudson Institute
In other news:
U.S. job market’s strength may surprise investors on Friday
Factors include storm effects, holiday hires, Amazon pay gains. (Bloomberg)
Trump mocks Macron again over French fuel tax protests
President Donald Trump took another swipe at Emmanuel Macron over violent protests against fuel taxes. (Reuters)
House members seek probe into XPO Logistics’ worker treatment
A letter from Democratic lawmakers cites allegations over pregnancy discrimination, warehouse working conditions, driver classification. (WSJ)
Market Insight: private equity shows how it is done, with EV Cargo
A six-way merger of transport assets in the UK recently highlighted that private equity can play a pivotal role in helping the industry accelerate consolidation. (The Loadstar)
Waymo unveils self-driving taxi service in Arizona for paying customers
Waymo on Wednesday launched a significant development in its costly, decade-long quest for autonomous transportation. (Reuters)
Final thoughts:
The Association of American Railroads has called on the federal government to “include our industry” in the national conversation over the future of autonomous vehicles. However, a move towards autonomous trains would likely not sit well with railroad labor, which, despite not being the presence it was 20 to 30 years ago, remains a force to be reckoned with. Through the years, the rails have been able to scale back crew sizes from what existed during the days of regulation and in the first 10 to 15 years after the landmark Staggers Rail Act, the 1980 law that deregulated much of the industry. Yet unlike in trucking, labor unions are a key factor in rail operations.
Hammer down everyone!