Futures Slump on G-7-Trump Drama

Look at this shit. Trump is going in hard against Canada, France and the G-7. He’s bring the trade war from Asia all the way back home and now over the Atlantic to the faggots residing in Paris.

Looking forward to straightening out unfair Trade Deals with the G-7 countries. If it doesn’t happen, we come out even better!

— Donald J. Trump (@realDonaldTrump) June 8, 2018

Canada charges the U.S. a 270% tariff on Dairy Products! They didn’t tell you that, did they? Not fair to our farmers!

— Donald J. Trump (@realDonaldTrump) June 8, 2018

Why isn’t the European Union and Canada informing the public that for years they have used massive Trade Tariffs and non-monetary Trade Barriers against the U.S. Totally unfair to our farmers, workers & companies. Take down your tariffs & barriers or we will more than match you!

— Donald J. Trump (@realDonaldTrump) June 8, 2018

Prime Minister Trudeau is being so indignant, bringing up the relationship that the U.S. and Canada had over the many years and all sorts of other things…but he doesn’t bring up the fact that they charge us up to 300% on dairy — hurting our Farmers, killing our Agriculture!

— Donald J. Trump (@realDonaldTrump) June 7, 2018

Please tell Prime Minister Trudeau and President Macron that they are charging the U.S. massive tariffs and create non-monetary barriers. The EU trade surplus with the U.S. is $151 Billion, and Canada keeps our farmers and others out. Look forward to seeing them tomorrow.

— Donald J. Trump (@realDonaldTrump) June 7, 2018

Markets don’t like this rhetoric, so futures are off 50, Nasdaq ~40. Truth is, this is just rhetoric. Trump is like a child who needs to be placated. All of his threats, or at least most of them, end up in nothing. I would not be surprised to see stocks dive down lower on this news, especially because it’s Friday — but I’m pretty sure it won’t last long.

Trade wars aside, we’ve got a pretty good thing going here, globally. Business is strong, spirits are high, and markets have never been better. There’s literally nothing to fear but fear itself, or Zerohedge.

This is something that might rattle markets at little, should people pay it mind.

Near-term memory softness – reducing estimates on LRCX, AMAT, ASML, etc – Cowen (188.83)

Cowen notes recent checks suggest that market concerns regarding near-term NAND and DRAM capex softness appear to be true, but is not demand related, but more focused on pricing. They believe there is potential for wafer fab equipment (WFE) spending push outs due to chip pricing (for NAND and DRAM) and to a lesser extent yield-related issues (DRAM 1Y-nm) at Samsung. They view this as a timing related issue and believe it could be reflected mostly in C2H estimates and translates into roughly $2.5B in WFE spending. They are lowering 2018 industry WFE forecast from +12% Y/Y to +6% Y/Y and raise CY19 to +13% Y/Y from +4% Y/Y. Clearly LRCX (Outperform) and AMAT (Market Perform) might see the most impact due to their memory exposure, and KLAC (Outperform) appears the most defensive. They view this as near-term weakness and resulting in a resetting of expectations and forecasts. The more important takeaway, in their view, is that both CY18 and CY19 would still be growth years for WFE and speaks to their thesis of improved durability and lowered variability (less cyclicality) for the sector. Also reducing forecasts for KLAC, AEIS, and MKSI but maintain positive LT outlooks.

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