Friends
Everything looked to be just fine. Despite the Chinese announcement of additional tariffs (which sent stock futures lower right before the open), Fed Chair Powell’s opaque speech at Jackson Hole seemed effective enough to settle things down, and by about 9:15 stocks had actually worked their way into positive territory. Then, the President went nuclear. He blasted Jay Powell then declared China the “enemy” and last, but certainly not least he wrote – “American Companies are hereby ordered to immediately start looking for an alternatives to China…”. Now, I could be wrong, but I don’t think an American President can order corporate America to “bring their companies home”. Regardless, stocks collapsed and the selling got worse as the day wore on. The demeanor of the President finally negatively affected stocks today. Many market participants might agree with what the President is trying to accomplish, and it’s not easy, but today the markets were unnerved by his temperament and impulsiveness.
By the close, the Dow Jones Industrial Average was down 623 points to finish the day at 25,628. The S&P 500 was down 75 points to close at 2,847. Gold was up $29 to trade at $1,538 per ounce, while oil was down $1.43 to trade at $53.92 per barrel WTI.
We appear to be in a full-fledged trade war now (well, at least until the next tweet), but that would likely force the Fed to be even more accommodative than they might have been already leaning. So, let’s just catch our breath, see what the President unveils this afternoon, and prepare for next week. Remember, headline filled days like today are not to be acted upon. Long term investment goals are achieved through patience, planning and determination. We’ll be back at it for you next week.
Have a great weekend everyone.
