More China Trade War news drove markets Friday as pre-market stories indicated that there was “fierce opposition” in the White House to rolling back tariffs as part of any phase one deal. This caused a gap lower in the SPY, QQQ and IWM. However, this gap was quickly faded…until President Trump told reporters he had not agreed to rollback tariffs (as his Senior Economic Advisor Larry Kudlow had told Bloomberg on Thursday was agreed with China).
The President’s comments sparked another mid-morning selloff. However, the rest of the day the bulls slowly regained momentum, driving prices higher right into the close. The day finished with another new all-time high close in the SPY, DIA, and QQQ. Even the IWM closed with a nice white candle back in its recent range.
There is no US economic news on tap for Monday (or Tuesday) due to the Veterans Day holiday. In addition, the only earnings report of note Monday is HPE. However, there is some International news. The UK (5th largest economy in the world), reported a shrinking GDP and Germany (4th largest) is expected to do the same on Thursday. This would put two of the largest economies in the world (and the two largest in Europe) into recession.
Meanwhile, in China, the BABA “Singles Day” sale has sold over $31bil in merchandise (and climbing) in its one-day sale. At the same time, the unrest in Hong Kong has escalated again with Police shooting at least two people, causing a flash mob that shut down downtown traffic. Another man (who apparently opposed the mob) was set on fire and those three are among 60 casualties today.
Overnight, Asian markets were all in the red, on Hong Kong unrest and US-China Trade fears. In Europe, markets are also in the red on the UK recession and Global trade fear. As of 7:30 am, U.S. futures were on-track for a half percent gap lower across the board.
With the vast majority of earnings behind us, fear of global recession, twists in the China Trade War and (Impeachment-related or meant to distract from the Impeachment) political news are likely to drive news cycles and markets again this week. Remember to be cautious and continue to take profits and move stops.
Ed
Swing-Trade Trade ideas for your consideration. Long – KHC, GPC, PSX, K, MAS, PCAR, AMD, VLO, AMP, IR, CE, ROL, UTX, STI, MS, OLLI. Short – EFX, ETR, KO, MLM, HSY, SBUX, DG. Trade smart, take profits along the way and trade your plan. Also, do not forget to check for upcoming earnings. Stocks we mention and talk about are not recommendations to buy or sell.
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