“Trade War Naysayers Must Apologize”

“Trade War Naysayers Must Apologize”

$DIA, $SPY, $QQQ, $RUTX, $VXX

S&P 500 sets new intraday and closing records

DJIA +132.66 at 27090.72, NAS Comp +82.87 at 8325.99, S&P 500 +16.87 at 3039.42

Volume: Trade on the NYSE came at 777-M/shares exchanged

The S&P 500 set new record highs Monday, increasing 0.6% as trade sentiment remained upbeat and investors reacted positively to corporate news.

The NAS Comp (+1.0%) and Russell 2000 (+0.9%) led, DJIA (+0.5%) lagged its peers. 

Both the US and China continued to work on “Phase One” of a trade agreement over the weekend, which President Trump said is “ahead of schedule” for him to sign. China’s state-run media reported that technical consultations on parts of the text were “basically completed.”

Jim Cramer on TV Monday, declared that people who predicted the US-China trade war would significantly damage America’s economy should apologize.

Mr. Cramer spoke just before the S&P 500 hit a record high Monday, while the NAS hung just below its all time high touched in late July, as a more conciliatory tone between the United States and China buoyed hopes for a possible trade deal and investors anticipated a rate cut by the FOMC later this week.

“I think there’s some mea culpas that we need to hear from the people that said cyclical America would be damaged,” the “Mad Money” host said on CNBC.

“It turns out, the industrials are not as perturbed about China as you would have thought,” he says.

“I really liked the industrials that reported last week. Very solid. Really solid,” Mr. Cramer said. “It turns out, the industrials are not as perturbed about China as you would have thought.”

To be sure, the S&P 500 rose as much as 0.7% to 3,044.08, breaching the record intraday high hit on 26 July, Reuters explained.

President Trump said Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing, building on optimism from Friday when Washington said it was “close to finalizing” some parts of a trade deal.

Economic data shows that the trade dispute between the 2 largest economies has begun take a toll on both countries, leading to worries about a global slowdown.

Global central banks have responded by easing monetary policy. The Fed is expected to be the latest to follow that trend at its two-day policy meeting beginning Tuesday, with the expectation that it will cut interest rates for a 3rd time this year.

Looking ahead, investors will receive the Conference Board’s Consumer Confidence Index for October, Pending Home Sales for September, and the S&P Case-Shiller Home Price Index for August Tuesday.

  • NAS Comp +25.5% YTD
  • S&P 500 +21.2% YTD
  • Russell 2000 +16.6% YTD
  • DJIA +16.1% YTD

Heffx-LTN’s overall technical outlook for the major US stock market indexes are Bullish to Very Bullish in here.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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