Markets Drop as Trade Tensions, Political 'Mayhem' Weigh on Investors
*By Kavitha Shastry*
U.S. markets dropped Monday as questions over the future of Deputy Attorney General Rod Rosenstein added to investor concerns, which were already heightened by the onset of the latest round of tariffs on Chinese goods.
"The political environment seems to be mayhem on a daily basis, and we're just going to have to get used to that," said Jason Moser, analyst at The Motley Fool, in an interview on Cheddar Monday.
Reports emerged late in the morning that Rosenstein, who's overseeing Special Counsel Robert Mueller's investigation into Russian interference in the 2016 election, was resigning his post after a [bombshell report](https://www.nytimes.com/2018/09/21/us/politics/rod-rosenstein-wear-wire-25th-amendment.html) last week that he'd suggested recording conversations with President Donald Trump and recruiting cabinet members to call for his impeachment. Later stories suggested Rosenstein expected to be fired, and then that he would meet with the President Thursday to discuss the situation.
The news accelerated losses on the Dow Industrials, with the benchmark index falling nearly 200 points at the lows of the day.
Industrial stocks were among the biggest drags on the market ー DowDuPont ($DWDP), Caterpillar ($CAT), 3M ($MMM), and Boeing ($BA) were all down more than a percent. General Electric ($GE) saw shares fall to a nine-year low.
The weakness came as tariffs on $200 billion worth of Chinese goods ー and reciprocal duties on $60 billion worth of U.S. exports ー went into effect at midnight. In the days leading up to the deadline, many American companies, including Walmart ($WMT) and Target ($TGT), warned the taxes will force them to raise prices for U.S. consumers. Even companies like Apple ($AAPL), whose smartwatches, AirPods, and flagship iPhones were spared in this round, have spoken out against the levies.
"Ultimately tariffs do nothing but increase the cost of doing business with everyone," Moser said. "That's the more relevant issue as it pertains to housing, which is such a big cornerstone of our economy. That's something investors want to pay a little more attention to."
The National Association of Homebuilders estimates that a full $10 billion dollars worth of affected imports are in the renovation and construction space. Shares of companies like Toll Brothers ($TOL) and Lennar ($LEN) were both down more than 2 percent to start the week.
Markets also reacted Monday to a slew of multi-billion dollar mergers.
SiriusXM ($SIRI) said it was buying music-streaming pioneer Pandora Media ($P) for $3.5 billion, and fashion brand Michael Kors ($KORS) reportedly was nearing a deal to buy Versace for about $2 billion.
Comcast ($CMCSA) also won the long-running war for British broadcaster Sky, outbidding 21st Century Fox ($FOXA) with a $38.8 billion offer at auction over the weekend.
Some analysts wondered why the media giant was willing to pay such a high price for a legacy brand.
"This seems to be doubling down on the past," said BTIG analyst Rich Greenfield.
Comcast shares fell nearly 6 percent Monday, at one point posting their biggest percent loss since 2009.
For full interview [click here](https://cheddar.com/videos/why-siriusxm-purchase-of-pandora-is-not-a-big-surprise).
Nvidia on Wednesday became the first public company to reach a market capitalization of $5 trillion. The ravenous appetite for the Silicon Valley company’s chips is the main reason that the company’s stock price has increased so rapidly since early 2023.
Chris Williamson, Chief Business Economist at S&P Global, breaks down September’s CPI print and inflation trends, explaining what it means for markets.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
