[Chart courtesy of MarketWatch.com]
- Moving the markets
Again, it was a trading day that had me shaking my head. After yesterday’s drubbing, with the Dow losing close to 400 points, an explosive rebound sent the major indexes back into rally mode wiping out just about all of yesterday’s losses.
It was a headline, that the speed-reading computer algos interpreted as an incredibly positive event regarding the US-China trade dispute. The statement that caused this violent bullish reaction was this one:
…some tariffs will take effect on Sept. 1 as planned, “certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent,” the U.S. Trade Representative’s offices said in a statement Tuesday.
“Further, as part of USTR’s public comment and hearing process, it was determined that the tariff should be delayed to December 15 for certain articles,” the statement continued.
“Products in this group include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.”
In other words, tariffs will go ahead on September 1st but tariffs on some products will be delayed until December 15 on the basis of health, safety and national security.
It looks like the algos only saw “delay” and “December 15” and the bidding war was on. If you think that this is ridiculous, you are correct, but this is the insane market environment we are living in.
In the end, the S&P 500 ended up close to where we left off on Friday with nothing gained but also nothing lost. It promises to be a hot August, as global/trade uncertainties will continue to affect volatility and market direction.(more…)