The President threw a hand grenade into the China trade situation by declaring that maybe it would be better to wait until after the 2020 election to do a deal. Now, we don’t attempt to decipher the actual likelihood that there will ever be a deal, or what a deal would even look like, but what we do pay attention to is how markets react to the President’s statements. Today’s reaction was negative as stocks sold off hard at the open. By the close, stocks had erased some of the losses, but the damage was done. Will there be a deal before December 15th? If not, will new tariffs go into effect? Trade appears to be what is triggering market moves, so every comment carries weight. But, remember, stocks had basically gone straight up all year. Whatever the reason, pullbacks are normal and necessary.
As for today, by the close the Dow Jones Industrial Average was down 280 points to finish the day at 27,502. The S&P 500 was down 20 points to close at 3,093. Gold was up $14 to trade at $1,483 per ounce, while oil was up $.28 to trade at $56.24 per barrel WTI.
I guess the bulls can hang their hat on the fact that today’s market reaction could have been worse, given where we were at the open of trading. Let’s see if things continue to be unsettled when we open things up tomorrow.
Have a nice evening everyone.