What’s going on in the world…
Market opens mixed after the DOW and S&P broke their daily win streaks at 6 and 5 respectively. May’s weakness has been largely erased by June’s strength, but an overbought situation is in place again and 2900 S&P provided some resistance with a reversal lower. Our sense is there are lower levels to be had and this bounce proves to be a dead cat variety. Global markets were largely in the red overnight, with Hong Kong suffering the worst, down nearly 2%. The protests have reportedly become violent which sets the stage for a big standoff, something China does not want but will certainly have to deal with. President Trump said he was holding up a trade agreement with China and reiterated his stance that there might be no deal at all. Reuters highlighted limited preparation and low expectations surrounding expected Trump-Xi meeting later this month. Bloomberg discussed how China seems to be preparing for a protracted trade war. SCMP said Chinese officials have started to think “no deal is better than a bad deal.” NY Times highlighted concerns Wall Street has not factored heightened trade tensions into earnings estimates. French President Macron, who told Swiss TV he would back German Chancellor Merkel for the European Commission president role, if she runs for leadership. Oil keeps falling and $40 is back in the conversation. The Saudi’s and Russians certainly don’t want this, but don’t seem to be doing much about it with questions of the production cuts continuation. The Dollar is higher, as is Gold. Interest rates are ticking lower. It’s another active day on planet Earth.
Have a great morning,
Mike Frazier
