A whole lot of nothing. Basically that was the result of the hyperventilated meeting between Trump and Xi at the G20 gathering last Saturday, interestingly as I mentioned last week the outcome was in line with what I anticipated investors would cheer the most, no real changes, uncertainty is still in the game and now without a deadline.
This will allow the FED to cut rates at the end of the month while there is not any immediate risk for a trade war aggravation, beyond the rhetoric, which should continue to be erratic. Just like Trump saying a bunch of things about the meeting, selling it like a victory, for example that China will buy “tremendous” amounts of U.S. agricultural products”, which was not validated by the Chinese, on the contrary, a state media reported that “Trump hopes China will import more American goods as part of the truce”, not that China will buy.
Photo by Hanny Naibaho.
The problem is simple, the economic risks are elevated, a lot of eyes will be focusing on this earnings season, for the past trimester and the outlook, because at the end of the day, the S&P500 is at record highs, after scoring the best June in 55 years and the best first semester in 21 years, while the Dow Jones cashed-in the best June in 81 years, all of that in the longest Bull market in history, so traders must remember that “gravity” does exist in the market, not the “normal” one, but caused by irrationality.
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