The trade war is over and the S&P 500 surged nearly one whole percent!
Well, not exactly. The trade war is nowhere near over but Trump tweeted, “Getting VERY close to a BIG DEAL with China.” That kicked off this morning’s explosive rally. Well, calling it explosive might be overstating the situation a tad, but it was a good day and the index closed at all-time highs.
Anyone hoping for more is sadly disappointed by this somewhat muted reaction. But this shouldn’t surprise those of us that have been paying attention. Yesterday I wrote that the stock market was growing tired of trade war headlines and deal or no deal, we shouldn’t expect a move greater than 1% in either direction. Today we got the strongest indication yet of a deal and the index surged a measly 0.86%.
More important than deal or no deal is how well the market has been performing this quarter. Despite the relentless barrage of negative headlines, stocks continue pushing into record highs. While some people claim the market is complacent and that complacency precedes the fall, the thing most people fail to mention is complacency can last for a really, really long time. When confident owners refuse to sell, supply stays tight and prices remain firm. This will end badly at some point because it always does, but this is not that point. In the meantime enjoy the ride.
As for what happens in January, I have thoughts on 2020 but will save those for another post. Sign up for FREE Email Alerts so you don’t miss those thoughts.
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Tags: S&P 500 Nasdaq $SPY $SPX $QQQ $IWM