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The stock seems ready to rebound after the technological mess of yesterday.
Perhaps we can thank the President of the St. Louis Federal Reserve, James Bullard, who said Monday that US interest rates may be too high given trade tensions – a subject on which financial markets are heard. Note, Tuesday, Australia has become the first central bank developed to cut rates in 2019, citing, yes, the global trade crisis.
On our call of the day from billionaire investor Stanley Druckenmiller, who is also convinced that the Fed will cut rates, or even zero. The well-known director claims to have bought Treasury bonds and seems to be preaching caution to equity investors in the face of the threats of the trade war.
"When the Trump tweet came out, I went from 93% investor to net-flat and bought a series of Treasurys," Druckenmiller told Scott Bessent, founder and chief investment officer of Key Square Capital Management at Economic Club of New York.
He was referring to President Donald Trump's tweet of May 6 that was threatening Chinese tariffs. This has prompted investors to sell stocks and invest money in the perceived security of state bonds. The tension between the United States and China has worsened since the publication of this tweet, while the fear of a large-scale trade war could trigger a recession in the United States, the recent tariff threat of Trump against the Mexico does not help.
Druckenmiller said he was caught unawares by Trump's tweet because he did not think the trade deal with China would explode. He said he changed his investments a month ago because he "did not want to play in this environment," saying investors also had to wait for better opportunities.
The fund manager has spent years managing a fund for billionaire investor and philanthropist George Soros. He left to focus on his own investment company, Duquesne Capital, which apparently never had a losing year and returned 30% a year until it closed in 2010.
"So I think if you trust your long-term vision and your ability to make money, it's not a great environment to bet on the ranch. Not short, not long, "said Druckenmiller. He knows how to use a top-down investment style that involves trading very bullish or bearish positions based on macroeconomic trends, which he has clearly found difficult today.
"I can not earn more than 30% a year and I do not even charge fees. It's a depressing environment, "he said.
This partly explains why he sought a certain security in the links. He added that if an investor thought that the US economy would deteriorate, the Treasurys would be "the best game in town", while "gold would not be bad either". Druckenmiller thinks the Fed could cut interest rates to zero in the next 18 months and maybe even 50 to 100 basis points next year.
However, he is not totally afraid of equities, claiming that companies that provide investors with the goods and services they need, whether they are "age-old" companies, can succeed in a "growth environment". nominal 1% "and are a good bet. He again expressed his passion for cloud-based companies.
It also owns Chinese technology groups Alibaba
Baba, + 0.44%
and
700 -1.92%
and insurer Ping An
2318 -1.56%
According to him, businesses are fueled by domestic growth.
Druckenmiller has also found time to launch an arrow in the US government, amid signs that large tech companies are now on his hit list. As the billionaire investor explained, the future of an economic war with China will be fought by artificial intelligence and the United States should help, not harm related companies.
He said China had started easing its private sector last fall and had strongly supported its own technology sector. "What are we doing Oh, we are saving steel, coal, aluminum, what are we doing with our leading technology companies, we are putting sand in the gears and making their lives miserable."
You can watch the full interview with Druckenmiller here.
The market
Dow
YMM19, + 0.78%
S & P 500
ESM19, + 0.76%
and Nasdaq
NQM19, + 0.94%
the futures are moving higher. It's after Nasdaq
COMP -1.61%
ended in correction territory on Monday. More coverage in Market Snapshot
10-year Treasury Bill yield
TMUBMUSD10Y, + 2.75%
climbed up to 2.10%, while the gold
GCQ19, -0.17%
is higher and the dollar
DXY, + 0.17%
is stable. Oil
CLN19, -0.08%
is down and flirts with a bear market.
European shares
SXXP, + 0.72%
are up, but Asia has mostly fallen, with China's stocks
SHCOMP, -0.96%
almost 1%. Australian equities rose slightly after central bank rate cuts in nearly three years, while Australian stocks
AUDUSD, -0.0287%
dollar had a lift.
The buzz
With big tech companies such as Google Alphabet
GOOGL, -6,12%
FB -7.51%
Apple
AAPL, -1.01%
and Amazon
AMZN, -4.64%
In the US government's line of sight, the question is what is the impact on consumers?
The Trump administration said Chinese officials were misrepresenting why trade talks were stalled. This is how China warns its citizens against the risk of harassment when they go to work, work or study in the United States.
Meanwhile, the chain of Chipotle restaurants
CMG, -2.77%
argues that burrito prices could rise if the US threatened to raise tariffs on Mexico.
Factory orders, which gauge the health of the manufacturing sector, will come after market opening, but otherwise, data will remain low for Tuesday. Check out our overview which includes an overview of the data on upcoming jobs for Friday.
Random readings
Several people reportedly died after a shooting in Darwin, Australia.
New study finds prices of original drugs double every seven to eight years
The lawsuit alleges that a Trump company failed to pay millions in Panama's taxes
The Court said Julian Assange, founder of WikiLeaks should not be extradited to Sweden on charges of rape
California regulators say your coffee is not bad for you
A deadly influenza strain maybe killed a young Texan couple in good health on holiday in Fiji
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