May 31, 2019

Global markets did not like Trump's Mexico tariff tweet

Photo: Chip Somodevilla/Getty Images

The market did not take Trump's Mexico tweet well.

Our thought bubble, via Axios' Felix Salmon: Strategically, it makes zero sense for the U.S. to enter a two-front trade war, engaging Mexico even as the confrontation with China is reaching a boiling point. China and Mexico are 2 of America's 3 largest trading partners. To start trade wars with both of them is a declaration of isolationism not seen since 1945.

By the numbers:

  • The Mexican peso fell almost 2% against the dollar to its lowest value since early March.
  • Yields on the 2-year U.S. Treasury note dropped below 2% for the first time since February 2018, and to the lowest since September 2017 on the benchmark 10-year note.
  • S&P 500 futures were lower by 1.2%, London's FTSE 100 fell more than 1%.
  • Chinese shares were slightly lower, falling by around 0.2%. Germany's DAX was off by more than 1.5%.
  • Shares of Ford lost 4% in pre-market trade. GM dropped more than 5%.

Be smart: "Imposing these tariffs is in principle, not allowed under the free trade agreement currently in place between Mexico and the United States or under WTO general frameworks," wrote Tania Escobedo, strategist at RBC Capital Markets.

  • "It is likely, however, that Trump will claim the measure is a matter of national security, referring to the International Emergency Economic Powers Act (IEEPA)."

Go deeper: Trump's Mexico tariffs could decimate the auto industry

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Stocks fall 4% as sell-off worsens

A trader on the floor of the New York Stock Exchange. Photo: Johannes Eisele/AFP via Getty Images

Stocks fell more than 4% on Thursday, extending the market’s worst week since the financial crisis in 2008 following a spike in coronavirus cases around the world.

The big picture: All three indices are in correction, down over 10% from recent record-highs, amid a global market rout. It's the S&P 500's quickest decline into correction territory in the index's history, per Deutsche Bank.

Coronavirus updates: California monitors 8,400 potential cases

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

33 people in California have tested positive for the coronavirus, and health officials are monitoring 8,400 people who have recently returned from "points of concern," Gov. Gavin Newsom said Thursday.

The big picture: COVID-19 has killed more than 2,800 people and infected over 82,000 others in some 50 countries and territories. The novel coronavirus is now affecting every continent but Antarctica, and the WHO said Wednesday the number of new cases reported outside China has exceeded those inside the country for the first time.

Go deeperArrowUpdated 1 hour ago - Health

Watchdog opens probe into VA secretary over handling of sexual assault claim

VA Secretary Robert Wilkie on Fox Business Network’s "The Evening Edit" on Jan. 7. Photo: Steven Ferdman/Getty Images

The Department of Veterans Affairs Inspector General Michael Missal said Thursday he had opened an investigation into VA Secretary Robert Wilkie after lawmakers demanded an inquiry into his handling of a sexual misconduct report, the Washington Post reports.

Context: Wilkie allegedly "worked to discredit" the credibility of Democratic aide and veteran Andrea Goldstein after she reported last fall "that a man groped and propositioned her in the main lobby of the agency's D.C. Medical Center," a senior VA official told the Post.