In a rush? Here’s the key takeaway
- Just a week ago when I wrote the morning note it seemed there was a genuine de-escalation in the trade war with both sides appearing to agree there would be a rollback of tariffs as part of the Phase 1 trade deal. But enter Peter Navarro and President Trump and things have gone a little awry. That hasn’t stopped China again asserting Thursday rollback is a necessary requirement of a deal…so I wonder are we slipping toward a May style disappointment or will something get done regardless.
- Copper, gold, the Aussie dollar, Japanese yen, European stocks, and global bonds seem to be wondering too with them all reacting to a more cautious tone on markets about the outlook to the promised trade deal. US stocks though are still elevated as the economic resiliency the economy is showing (you heard it here first more than a year ago) plays out and is highlighted by the Fed. Money flows could be helping too.
- So as it stands outside the US where the S&P 500 and Dow are sitting at 3096.6 and 27781 respectively not far from their record highs there seems to be a surfeit of caution once more. That might be just what risk appetite needs to recharge and push stocks to new records yet…as long as we don’t slip back to a May disappointment that is. Both sides need a deal I reckon, so maybe that’s the feeling but not the reality. Time will tell.
Now, let’s dive into this morning’s newsletter.
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