Friends
The President was the market’s best friend for a while, but has quickly become the market’s worst enemy. As tariffs are signed into existence the fear that retaliation will follow appears to be quickly becoming reality. The Chinese are rattling their sabers, but it is unknown what will really become of all this. The problem is that markets don’t like uncertainty, and the President has introduced uncertainty into the equation in spades. I’m simply commenting from a market participants point of view, and not opining on what constitutes free trade practices and what is the correct course of action. Simply put, the markets don’t like it.
For the day, the Dow Jones Industrial Average was down 424 points to close at 23,533. The S&P 500 was down 55 points to finish the day at 2,588. Gold was up $20 to trade at 1,348 per ounce, while oil was up $1.60 to trade at $65.90 per ounce WTI.
We came into the week thinking that the Fed decision would be the focus point of the week for traders. Unfortunately for the bulls, the idea of trade wars in our future set everything on a different path. The hope that the President was using tough negotiating tactics has turned into-this all might really be actually happening. Are the markets overreacting to all of this? Perhaps, but we’ll have to see how this all plays out as it’s something new that market participants haven’t had to deal with.
Have a great weekend everyone.
