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b'Recorded August 6, 2019
\\nTrade War: New Tariffs and Accusation of Currency Manipulation
\\nYesterday was the worst day of the year for the Dow Jones.\\xa0 At one point, we were down about 950-odd points.\\xa0 I think we closed down under 800; 767 points.\\xa0 But it was a follow-though from the weakness that we had on Friday and the news, too, that we had on Friday about the escalation of the trade war, where Donald Trump announced the imposition of new tariffs on China.
\\nNormal Movements in a Currency Market
\\nBut what happened overnight in China was the yuan went below 7:1 against the dollar. This is the first time it has been that low since China started to allow its currency to appreciate against the dollar. It had been appreciating\\u2026 now 7 is not that much weaker than it was when Donald Trump became President.\\xa0 The Chinese yuan is only down 2-3% since Trump took office. That\'s not a whole lot, when it comes to a currency. Everybody is up in arms; now Trump is upset that the Chinese are weakening their currency, when the currency has not weakened very much.\\xa0 In fact, the U.S. dollar is down about 2 or 3% against the Swiss franc since Trump became President. So what\'s the big deal? Switzerland isn\'t accusing the United States of manipulating its currency, just because the currency dropped a few percent. These are normal movements in a currency market.
\\nDow Trading Higher after China Blinks?
\\nBut the minute the yuan dropped below 7:1, everybody was saying, "Currency War!"\\xa0 and "Who knows how much further the yuan is going to drop?" And so that sparked a lot of selling in the Chinese market.\\xa0 And so the U.S. market went down\\u2026 I think the futures went down maybe about 300 Dow points or so before we opened.\\xa0 But then, as soon as we opened, we sold off hard and we did have a little bit of a rally into the close, so we closed off the lows, but as soon as the U.S. stock market closed, the futures sold off again. I think at one point last night, the Dow was off another 4-500 points before reversing on the Chinese yuan having a fix, I think, that was a little bit higher than the markets were worried about, so that caused the traders to breathe a little sigh of relief that the yuan didn\'t fall again. So that sparked a rally.\\n\\nOur Sponsors:\\n* Check out Rosetta Stone and use my code TODAY for a great deal: https://www.rosettastone.com/ \\n\\nPrivacy & Opt-Out: https://redcircle.com/privacy'