Trade Salvo Trumps All Headlines

By: Peter Haralambakis / April 6, 2018

The headline “du jour” is clearly another “shot across the bow” from the Trump Administration upping the ante by ordering U.S. officials to identify extra tariffs on an additional $100 billion in Chinese goods.  Beijing vowed to defend China’s national interest and considers this latest posturing a serious violation to the rules of international trade and is fully prepared to respond with a “fierce counter strike” of fresh trade measures against the U.S. if President Trump follows through on his latest threat.  Crude prices and global equity markets fell on the potential impact the heated rhetoric may have on the world economy.  As of 1pm EST, the Dow is down 350 pts, the S&P 500 is down 30pts, WTI for May delivery is down $1.18 at $62.36, HO is down $0.0168 at $1.9597, and RBOB is down $0.0289 at $1.9527.  As the latest threat of trade wars adds volatility to markets across the board, the S&P 500 continues to show resiliency testing and bouncing off its 200day EMA (exponential moving average) currently at 2,603.76 on ten different trading occasions.

S&P Continuation

All these tariff war proposals overshadowed some of more pressing major economic and fundamental headlines that peppered the wires all morning.  Below are a couple of headlines that SHOULD trump the trade salvo, which, we reiterate again are only proposals and nothing can be implemented or followed through until after a 60 day comment period.

U.S. job gains smallest in six months, wage growth picks up

Reuters · 4 hours ago

-Nonfarm payrolls increase 103k in March

-Unemployment rate unchanged at 4.1%

Today’s job data indicates no change in the Fed’s dot plot for three more hikes this year, which should have calmed the markets a bit.

Russia says wider cooperation arrangement with OPEC could be indefinite

Reuters · 8 hours ago

Couple these headlines with geopolitical risk in the mid-east with Iran sanctions on the horizon and Yemen’s Houthi militants firing missiles at Saudi naval ships in the Red Sea, should warrant a risk assessment of buying any pullback in the energy sector.

CL Continuation-27

If WTI can hold this most recent 7% pullback from its March 26th highs, we should continue to climb back up to the $65.23 level.  It appears for now we must hold on tight and absorb all the trade salvo rhetoric and continue to trade our most recent range of $60 - $65. 


Categories: Industry Update


Peter Haralambakis

Written by

Peter Haralambakis

Peter Haralambakis is a Supply and Trading Business Development Manager at Guttman Energy with over 13 years of experience in commodities trading, analysis, and risk management in products ranging from Corn and Soybeans to Crude Oil Futures and Options to Financial and Physical Biofuels to Natural Gas and Natural Gas Liquids.


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