Trump Tariffs Get Real

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, Feb. 3. The first trading day of February.

State of Play

Trump tariffs suddenly got very real over the weekend, with the new/old president imposing stiff tariffs on China, Mexico, and Canada. The trade war appears to be on. This has impacted markets overnight. As we eye our board of indicators for signs of direction at 0655, things are quite jittery indeed:

• Stock index futures are off of the lows, but pointing to big losses: Small caps, presumably most affected by higher import prices, are down 2.5%. S&P 500 and Nasdaq futures are down about 1.5% each;

• Cryptos are tumbling on this news as well. That is harder to blame on tariffs, but whatever. Bitcoin down 4% to trade around $95,000;

• Commodities are moving as you would expect: the price of oil is up 2.5% to $74.50/barrel. But then copper is down 1.2%, presumably because China will be importing less of the stuff if it exports fewer goods to the US market. Gold is unchanged as the US dollar rallies;

• Bond markets are quiet. The 10-year yield is down just 3 basis points to 4.54%.

‘Trump Tariffs Get Real’ by author via OpenArt.ai

Today’s Known Events

Of course, all of this will take a back seat to the Trump tariff concerns. But we do have some earnings to kick things off:

• Saia (SAIA 0.00%↑), a transportation company that should shed light on the state of shipping inside the US, is due this morning.

• Tyson Foods (TSN 0.00%↑), featured on the Stocks… segment back in August, is also out before the open at 0930;

• Palantir (PLTR 0.00%↑), NXP Semiconductors (NXPI 0.00%↑), and Clorox (CLX 0.00%↑) are among companies reporting after the close at 1600.

We also have ISM Manufacturing PMIs at 1000. The expectation is for a 52.6 print, effectively unchanged from last month’s 52.5.