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Inside Finance (Aug 7th, 2019)

1. Stocks are down again today. The good news is that stocks rebounded yesterday. But today, it's back in the red for all major American market indexes. At last check, the Dow was down 0.79 percent, the S&P 500 was down 0.62 percent, and the Nasdaq was down 0.37 percent. Investors are increasingly of the opinion that China will accept harsh economic hits in an effort to hamper President Trump's reelection efforts. Those economic hits have ripple effects here in the U.S., too, so investors are worried that we could be in for rocky economic waters. – CNN

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2. President Trump is bucking the widely accepted theory that trade tensions are driving economic uncertainty and sell-offs. Instead, President Trump is blaming the Federal Reserve. It's part of a months-long tirade against the Fed, in which the president has claimed that benchmark interest rates are too high. He also falsely stated that the Fed is still in the middle of "quantitative tightening," or rolling bonds off the government's balance sheet to reduce debt. Last week, the same Fed meeting that cut rates also ended quantitative tightening. Yesterday, all living former Fed leaders penned a joint op-ed, arguing that the Fed works best when it is free of political pressure. – THE HILL

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3. Jargon Watch: Fear & Greed Index

Major downturns lately have spooked a lot of us who watch the markets, and if you want to quantify that fear, just turn to CNN's Fear & Greed Index (FGI). The tool compiles seven market measurements (including a similar and older fear index known as the CBOE Volatility Index, or VIX) to give the market sentiment a number between zero and 100. The higher the number, the greedier investors are acting. The lower the number, the more fear is driving market movement. This morning, the index was at 22—extreme fear.

In addition to the VIX, the FGI tracks six other data points. Each measures how much investors are trading and what they're trading. For example, if more investors are shifting away from stocks and toward bonds, that signals a growing fear about short-term performance. The index is a useful tool to add to an investor's tool belt. When the index shows that greed is high, prices could be inflated, and investors might want to wait before buying more stocks. Oppositely, intense fear can drive sell-offs that push the price below what a company is actually worth—presenting a good investment opportunity. Remember that the FGI is just one tool that should be used in combination with others. Irrational fear could present investment opportunities, but not all fear is irrational. – THE BALANCE and CNN

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4. Oil prices dipped into a bear market yesterday, and the prices are still falling. Despite President Trump's insistence that interest rates are to blame, it's widely accepted that trade tensions are raising concerns about the global economy. Less trading means less oil being used to transport goods, so when trade tensions escalate, oil prices fall on the expectation of less demand. Brent Crude, an indicator of oil demand, has fallen 10 percent since President Trump tweeted out fresh tariff threats on Thursday. Adding to price pressures, the U.S. surprised markets by announcing an increase in domestic crude stockpiles. It's the first time in nearly two months that U.S. inventories have increased. It's Econ 101: more supply + less demand = plummeting prices. – WSJ

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5. Shifting to taxes, President Trump has filed a new lawsuit that seeks to overturn a new California law concerning taxes and ballots. Last week, California Gov. Gavin Newsom signed a new law into effect, requiring presidential and gubernatorial candidates to release five years' worth of tax returns to appear on the state's primary ballot. The president's lawsuit calls that an "unconstitutional qualification" that violates his First Amendment rights. It's the latest legal front in President Trump's efforts to prevent the public from seeing his tax returns. His legal team is also challenging a New York law that would allow Congress to access the president's state tax returns. – TIME

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6. The president's Twitter tirade against the Fed this morning was in part inspired by unexpectedly large central bank rate cuts around the world. New Zealand cut rates to an all-time low of one percent. In India, the central bank delivered another rate cut—the fourth-straight meeting to cut rates. Thailand also delivered an unexpected rate cut, its first since 2015. – CNBC

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7. Amazon CEO Jeff Bezos has recently sold off shares in the company worth billions. According to SEC filings, Bezos made a total of $2.8 billion in stock sales last week. Amazon wouldn't comment on the move, but Bezos has previously said that he plans to sell $1 billion in stock every year to fund his space exploration company, Blue Origin. – REUTERS

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8. Disney shares are falling today after the company's quarterly report fell short of analyst expectations. CEO Bob Iger blamed the lackluster performance on its recent acquisition of Fox entities and investment in upcoming streaming services. Disney warned that those factors will also weigh down earnings when the next report comes out, but it still thinks the investments will pay off in the long run. – CNBC

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9. Tesla is again in regulatory hot water after getting a cease-and-desist letter from the National Highway Traffic Safety Administration. CEO Elon Musk actually got the letter in October, but it only just became public thanks to a Freedom of Information Act request from PlainSite. At issue here are Tesla's comments about the safety of the Model 3, comments the government calls "misleading." One Tesla blog post claimed that the Model 3 has "the lowest probability of injury of any vehicle ever tested by" the NHTSA, without acknowledging that the statement only applies to cars of a similar size. – THE VERGE

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10. FedEx stock is falling today after the company announced it will no longer complete ground deliveries for Amazon. The company similarly dropped Amazon from its air shipping service in June. The move appears to have made investors nervous, but FedEx is hoping to bolster confidence by pointing to the fact that Amazon made up less than 1.3 percent of its 2018 revenue. – CNN

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Schuyler Durham writes Inside Finance. He’s a lifelong Portlander who got his start covering the local music scene, but later became enamored with the complexities of financial and political reporting. After three years in broadcast news, he's now diving back into the digital realm. You can keep up with his writing on Twitter at @SchuylerWriter or watch him goof around on Instagram at @bitterbuddha.

Editor: David Stegon (senior editor at Inside, whose reporting experience includes cryptocurrency and technology).

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