Afternoon Note
Nice market bounce, although there is still lots of upside ahead to test to signal the kind of reversal that can make us aggressive. For the S&P 500, the first big test is 2,662 on a closing basis, and from there, we see lots of room to the upside. Technology is leading the way as chip stocks have regained their groove and swagger.
S&P 500
Working towards Deal
The market is edging higher with cautious optimism centering in part on a potential thawing of tensions between China and America on trade. On Tuesday, in what is being billed as the world’s largest economic forum, Boao Asia Forum in Hainan China, President Xi will have a chance to make overtures towards open markets.
The forum is considered now to be more influential than the Davos gathering of world elites and big business, so the stage is set. At the very least, expect terms like “free trade” and “open markets” to be used, as China paints the Trump administration as protectionists. But this is about attracting foreign investment, not saber rattling.
This could be the kind of overture the market assumed with its 1,000 Dow point reversal from Wednesday’s low to Friday’s high point.
Farm Aid
President Trump today reiterated a pledge to help American farmers in the event China tariffs hurts their income. People should know the prime target, soybeans, are up more than 8% this year, but down 25% in the past five years, underscoring the significant issue that some will try to foist on the administration.
Soybeans have done substantially better than the stock market in 2018.
The fact is supply from other nations have already curbed U.S. exports to China, which is more reason for smarter deals. Read: lower tariffs, which are more than 15% on agricultural products.
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WHAT AN AFTERNOON REVERSAL THE MARKET HIT THE SKIDS NOT A GOOD SIGN LOOK OUT FOR TOMORROW ERNEST REMUS on 4/9/2018 4:16:03 PM |
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