By Mark GongloffTodays Agenda Trade wars and stocks Big Governments comeback Grading the ECB Bitcoin bloodbath The World Cups costs and benefitsMaybe Trade Wars Are Bad and Easy to LoseAn old Wall Street saw says Buy on the sound of cannons, sell on the sound of trumpets, meaning stock traders see wars as buying opportunities.
The story may be different if those cannons are aimed at their wallets, however.Until recently, President Donald Trumps waving of the trade-war stick at China and various allies has generally elicited stock-market yawns.
But Trump's new tariffs on Chinese goods today may have been a hot pot of coffee.
China fired back with massive tariffs of its own, and Trump has threatened to retaliate for China's retaliation.
Suddenly the trade wars seem to matter a bit more to stocks; the SP 500 fell about one percent before recovering at the end of the day.
And trade wars matter in some quarters more than others.
Qualcomm Inc.s pending merger with NXP Semiconductors NV is suddenly complicated, notes Alex Webb.
Chinas government is telling big United States companies doing business in China to "buckle up" should Trump follow through on his anti-trade vows.Trumps former economic adviser, Globalist Gary Cohn, has said trade wars could cost the United States economy $2 trillion wiping out the Trump administrations claimed tax-cut boost.
That may overstate the damage, writes Stephen Gandel but not by much.
Comparing the market valuations of big-company stocks against those of small companies which youd expect would feel a trade war less Steve suggests trade agita might already have shaved $1 trillion from big-company values:And the way companies have spent their tax cuts on buybacks and mergers rather than investment and hiring just so happens to be what a company would do if it was worried a trade war might blow up in its face, notes David Ader.Trump seems to pay attention to the stock market, and too much howling there could make him cool his trade cannons.
But maybe its better to hide from them now and sound the trumpets later.Big Governments Not Dead YetWho said, The era of big government is over Was it:a Ronald Reaganb George H.
W.
Bushc Bill Clintond Herman CainThe answer is c, Clinton, which may surprise you; it's something you'd expect a Republican to say.
But it reflected the zeitgeist when Clinton said it in 1996, 16 years after Reagans small-government revolution.
And now, in another surprise, with a different Republican in the White House, big government is coming back.Again, this may seem incongruous; Trump has been hacking away at regulations and the social safety net.
But he's also using government to intervene in free markets and prop up dying industries.Meanwhile, socialism is making a comeback in Americas popular imagination, notes Noah Smith:Maybe so many decades have passed since Americans elected Reagan to fight big government that we forgot why we ever worried about it.
Maybe it was the exciting presidential run of the openly socialist Bernie Sanders.
Maybe the GOP's relentless attacks on government services make people appreciate them more.
And maybe problems like yawning inequality and a dismal health-care system just obviously call out for big-government answers like, say, a guaranteed job or Medicare for all.
It might not be long before another president openly embraces Big Government again.Easy Does It, ECBThe European Central Bank is taking its sweet time pulling the props away from Europes economy, and that's a good thing, write Bloombergs editors.
The economy looks like it could use some help again although European governments could stand to learn to handle their own problems.Bitcoin BloodbathBitcoin prices have plunged by two-thirds over the past six months or so, and theres no sign of a bottom yet.
Lionel Laurent points out that the cryptocurrencys whole investment thesis has so far been based not on the growing adoption or utility of bitcoin, but on finding a greater fool to buy your bitcoin.
For some reason, those fools have gone missing.The World Cup: A Cost-Benefit AnalysisToday was the second day of the World Cup in Russia.
Morocco wrecked my temporarily Bloomberg LP-leading bracket by forgetting how to score, in its opponents goal anyway.
The fact that I noticed that during my work day is a reminder that big sporting events like these can be hell on productivity.
Maude Lavanchy and Willem Smit try to figure out just how much economic value these things destroy.
But hosting the World Cup in 2026, as the United States will do with Canada and Mexico, wont cost the country much, points out Conor Sen.
In fact, it could be a big moment for the United States to rebuild the bonds with its neighbors and the world that Trump has been busy trying to break.Leonid Bershidsky and Mac Margolis, on the other hand, wonder how much the World Cup even needs the United States Chart AttackTara Lachapelle and Elaine He look at all the crazy places Media Mega Merger Madness could take us, with the Media Merger Wheel:Citigroup is increasingly getting into some risky business, writes Stephen Gandel.Speed RoundA Bernie Madoff feeder-fund manager has come out pretty sweet.
Joe NoceraOPECs meeting next week cant paper over its structural problems.
Liam DenningNot even Oprah can solve Apples entertainment problems.
Shira OvideWe should change securities laws so everybody can invest like Harvard.
Nir KaissarThe Justice Departments inspector general report mainly revealed irony.
Eli Lake(This column does not necessarily reflect the opinion of economictimes.com, Bloomberg LP and its owners)