When I woke up at about 4:30, I wearily glanced at my iPad, and I saw futures were down pretty hard. Nice. I went back to sleep. An hour later I woke up for real, and saw everything was green. And what, pray tell, caused this nearly 30 point spike? None other than that weasel Steve Mnuchin, who – as seems to be the habit of this administration – walked back all the tough talk about China. The response was instant.
So the statement “We’re going to get tough on China” seems to have joined the long list of promises like “We’re going to build a wall and Mexico is going to pay for it”… or… “We’re going to lock her up” as the kind of declaration that gets the masses excited but never amounts to anything at all. Monday’s drop in equities, which lasted merely a few hours, was all it took to utterly cause the administration to tuck their tails and run.
I would simply point out that, if you step back, it’s the context of this move that matters. Keep an eye on 2736 on the ES.
