107.9FM NYJ/LA

Translate This Page

Tinder jumped. Match jumped. Then IAC jumped.

Posted by Digestible Financial News on Thursday, August 8, 2019

Feels like that

Dow Jones
25,718 (-2.90%)
S&P 500
2,845 (-2.98%)
7,726 (-3.47%)
$11,790 (7.03%)
10-Yr US Treasury

Hey Snackers,

We'll cut right to it. That was rough.

Stocks suffered their worst day of the year as the US/China trade war just erupted on a whole new front: the currency battlefield. More below.


Stocks plummeted because of China's dramatic currency move

Not quiet on the Eastern front... Governments worldwide let the free market determine how much a dollar, peso, real, or pound is worth through supply and demand. Europe buying some fancy American corn? They'll have to sell euros and buy dollars first. That's why those airport currency exchange boards are constantly changing. But China's government does the opposite — it dictates how much yuan each $ is worth. Then this happened Monday:

  • What China did: The government is weakening its currency so that your $1 now buys a whopping 7 yuan — the weakest level the currency has hit in over a decade.
  • What the US did: It called out China — the Treasury Department labeled China a "currency manipulator," a naughty list the country hasn't been on since 1994.

Currency manipulation = Tariff kryptonite... China just opened up a whole new front in the trade war because this move neutralizes US tariffs. It's an intense escalation, but it's classic trade war tit-for-tat-for-tit-for-tat. Here's why it went down:

  • Last week, the trade deal talks in Shanghai didn't end well.
  • The US pledged a 10% tariff on the remaining $300B in Chinese goods not yet tariffed (mainly consumer goods you use, like toys and tech stuff).
  • Since tariffs are like taxes, that would make the Chinese-produced iPhone X 10% more expensive to Americans.
  • So by weakening the value of its currency compared to the US dollar, China offsets part of the tariff's impact.

Nobody really wins in a trade war... At first, US tariffs hurt China by making it more expensive to manufacture across the Great Wall, encouraging US companies (like Apple) to make stuff elsewhere. Now, China's currency manipulation hurts American companies because their Chinese competition is suddenly cheaper for customers to buy. Trade wars are races to the bottom (welcome to the new front).



Invest, spend, and earn 2.05% APY*–all through your brokerage account.
Our goal at Robinhood is to democratize finance. This means delivering products that help you do more with your money and improve your life. Today, we're excited to introduce Cash Management, a new feature to give you more flexibility with your brokerage account.
Flexible Spending
Use your Robinhood debit card anywhere Mastercard® is accepted around the world.
Earn 2.05% APY
Your uninvested cash is moved to banks in our program that pay you 2.05% APY*. Like all variable rates, this could go up or down over time.
FDIC Insurance
Your cash in the program banks is eligible for up to $1.25 million of FDIC insurance, or up to $250,000 per bank, subject to FDIC rules.
75,000+ ATMs
Don't pay fees at any of the 75,000+ ATMs in our network.

See the source image

For the next two weeks, you can earn increasing levels of Stock-Back™ rewards when you shift your everyday spending to your Stash debit card.* 

Every qualifying swipe over $5 gets you closer to leveling up your Stock-Back rewards. Levels start tomorrow and reset to zero on Monday, November 18.

Follow Us


Flag Counter

Flag Counter

Make a free website with Yola