Equites were volatile with different assessments of progress in trade talks. At one time the S & P 500 and NASDAQ were up over 3% following comments made by Treasury Secretary Bessent that the tariff standoff with China is unsustainable, expecting the situation to de-escalate.
Treasuries and the dollar posted smaller moves after Monday’s volatile day, volatility the result of the President’s remarks of potentially replacing FRB Chair Powell.
Perhaps the statement “that we are in a period of extreme uncertainty” is appropriate.
Most fear change as the known—whether it is good or bad—is more comfortable than the unknown.
Some have commented that today the economy/the markets are facing the greatest degree of uncertainty in many generations. Does it only feel more uncertain because it is the here and now? It is the immediate, constantly at the forefront of our attention.
I vividly recall 2008 and 2020 that similar statements were made, albeit the catalyst for the fear of that day was entirely different.
An argument can be made the President is only ancillary to an underlying trend. Economic Nationalism commenced in 2008, gained momentum in 2012 and accelerated greatly in 2020 and 2021.
Trade with China has already declined about 25% since 2020, partially the result of the re onshoring of essential productive capacity away from our perceived adversaries back to more friendlier shores.
The West has weaponized the flow of capital, and the East has weaponized the flow of goods since COVID and the Ukrainian War. Availability and reliability have replaced price as the primary determinant of a purchasing decision.
Today shall pass and another crisis will emerge.
This begets the next question…what it will be…out of control spending and surging deficits? It is not a question as to if but as to when this unrelenting spending will evolve into a severe crisis. At what juncture, what will cause or when will the proverbial sandpile topple?
After the close TSLA posted results that fell short of expectations but are rising in premarket trading as Musk stated he will focus more time on the company and “pull back” from DOGE.
Last night the foreign markets were up. London was up 1.41%, Paris up 2.34% and Frankfurt up 2.67%. China was down 0.10%, Japan up 1.89% and Hang Seng up 2.37%.
Dow and NASDAQ futures are up 2% and 3% respectively as the President stated he has “no intention” of firing FRB Chair Powell and the easing of some trade tensions with China. The 10-year is up 24/32 to yield 4.31%.
