Need to Know: What’s the play as the trade-war starter gun goes off? Buy the news

It is on.

The trade war that is, with U.S. tariffs kicking in as promised just after the clock struck midnight, and China apparently making good on its own promise to match. Even if this was all well-telegraphed, the reality may still be a bit tough to digest for Wall Street.

And for American businesses, the unease can only get worse, warns JonesTrading’s Michael O’Rourke. The chief market strategist reminds us that the biggest beneficiaries of globalization — something Trump has been vocal in criticizing — have been U.S. companies.

“American corporations need China more than China needs them, and with every escalation their uncertainty rises,” said O’Rourke.

While you’re watching trade headlines, though, don’t forget it’s jobs day. That’s as some are still chewing over those hawkish Fed minutes and the fact the central bank is paying close attention to the trade spat. So rub the sleep out of that third eye.

On to our call of the day, which predicts some “buy-the-news” action in the wake of the first big volleys of the trade war. Asian stocks finished higher, and there has been no huge flight to the dollar, gold or other havens this morning.

The call comes from Charalambos Pissouros at JFD Brokers, who points to how the market reacted when Trump first threatened those tariffs — with a slump of more than 500 points for the Dow.

“The markets have already responded to the proposal of these tariffs back in April. In mid-June, when the U.S. finally decided on the matter and China responded, markets remained somewhat indifferent, but they took a hit a few days later on Trump’s fresh threats,” says the JFD senior market analyst in a note to clients.

“Thus, for fears and anxiety to surge again, we may need to get new threats or unplanned actions. In other words, something that investors haven’t noted on their agendas,” he says.

In other words, wait for the tweets.

The market

That “buy the news” thing isn’t quite what we’re seeing in premarket, with Dow












YMU8, -0.38%










S&P












ESU8, -0.23%










 and Nasdaq












NQU8, -0.25%










futures headed lower, after a rebound for the Nasdaq












COMP, +1.12%










 drove the Dow












DJIA, +0.75%










and S&P 500 higher Thursday. Asia markets












ADOW, +0.47%










 saw a bounce, while Europe












SXXP, -0.15%










 is clinging to green.

Gold












GCU8, -0.29%










 is easing, the dollar












DXY, -0.15%










 is down, and crude












CLU8, -0.82%










 is also off.

See the Market Snapshot column for more.

The economy

It is nonfarm payrolls day. The big numbers roll out at 8:30 a.m. Eastern Time, and economists expect employment numbers to rise by 200,000, the jobless rate to reach 3.8%, but no big action on wages.

Check out: How low can U.S. unemployment go? What to watch in the June jobs report

The buzz

In the first salvoes of the trade war, the U.S. hit China with $34 billion in levies early Friday, and China fired back. But just before that, Trump upped the ante by threatening $500 billion in tariffs against the Middle Kingdom — for roughly the amount of total goods the U.S. imported from China last year.

On that note, Ford












F, +0.55%










 says its China sales slumped 38% in June. Meanwhile, big Chinese ports are apparently already holding up U.S. goods.

J.P. Morgan












JPM, +0.65%










 says, no, it isn’t interested in buying into Deutsche Bank












DB, +4.02%










But shares of the embattled German bank are flying anyway.

Elon Musk is sending SpaceX and Boring Co. engineers to Thailand to see if they can help rescue the 12 boys stuck in a cave. The Tesla












TSLA, -0.55%










 CEO has been on Twitter discussing ideas such as creating a tunnel through the flooded cave network to let them walk out. No rescue will be easy — it has already cost the life of a Thai navy diver.

Sec. of State Mike Pompeo will present Kim Jong Un with a CD recording of “Rocket Man — echoing Trump’s taunt — at their meeting in Pyongyang on Friday.

A top executive at Wynn Resorts












WYNN, +1.75%










 , who knew about a secret $7.5 million settlement between CEO Steve Wynn and a casino employee, is stepping down.

Over in the U.K., Prime Minister Theresa May is holding a crucial cabinet meeting in the countryside to discuss her new Brexit plan — though Airbus’s CEO says her government “still has no clue” about how to exit without severe harm.

The chart

Forget the thrills and spills — the U.S. stock market really has gone nowhere in 2018. So writes Michael Kramer, founder of Mott Capital Management, who discusses the S&P 500’s lack of progress in a blog.

Here’s his chart, which lays out a bumpy ride to nowhere for the index:



“The ebbs and flows of good and bad news are two forces that the market is entirely undecided about, and for the most part, it keeps a lid on the stock market,” says Kramer.

On the one hand, there is a strong economy that should lead to strong earnings growth and higher stock prices. But threats of a global trade war have kept getting in the way, he explains.

In a second blog, he talks about how all that frustrating action has left investors with a “have and have-not market,” where the winners are tech, consumers and biotech (minus chips) and the losers are on the front lines of a trade war — industrials, materials and staples:



Win some, lose some

Kramer’s got a lot more insight on the topic. Check out his full thoughts here.

Opinion: Why the odds are good that stocks will be higher at the end 2018

The quote

“This is so uncalled for. Going after a 94-year-old former president’s promotion of volunteerism. I don’t mind POTUS being a fighter. I do mind him being rude.” — That was Ari Fleischer, who served in Bush 43’s administration, on Twitter.

He was referring to a speech by Trump in Montana, where the U.S. president took a swipe at the rhetoric of a “thousand points of light.” That phrase was in the inaugural speech by Bush 41, who set up the Points of Light Foundation for volunteering in 1990.

Random reads

Father of Holocaust victim Anne Frank tried to get U.S. visas but was blocked by immigration.

Japan executed a doomsday cult leader guilty of deadly sarin attacks in the ’90s.

Marcel the French pig makes his World Cup predictions ahead of a big weekend.

Nothing to see here: Canada PM responds to 18-year old groping allegation.

New York Mayor Bill de Blasio used a $3 million plane to jet back from a vacation.

Protests to mark Trump’s U.K. visit next week include a 19-foot angry “Trump baby” balloon.

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