since 2008, sending it daily shortly after the market close.
The opinions expressed below are my own and do not necessarily represent those of Harvest Volatility Management, LLC.
3-day weekend. Bulls celebrated the coming 3-day weekend all session. Overseas equities were up 1-2% and our premarkets were up about half a percent. Earnings reports continue to help the longs even though Netflix fell 4% today. The broader market did not trade sympathetically with Netflix today. In the morning trading another headline/rumor about the US/China trade situation broke. This time it was from China and involved China offering to increase its purchases of US goods over the next 6 years. They suggested that they would increase purchases so much that they’d drive the US/China trade imbalance to zero.
The gesture spurred investors to buy and now there’s a specific set of outcomes imbedded in the market. A zero trade imbalance is a very Trump-specific carrot. It certainly sounds good. Will it actually play out that way? I don’t know. Should it cause us to boost our valuations? Again I don’t know. It certainly looks like China wants to come together with the US as resolve the dispute. This gesture is certainly a positive signal. We’ve seen them before and we’ve seen negative ones too.
There’s a lot of positivity out in equity land now. The rally from Christmas Eve has been remarkable. January has been a Godsend for the longs. The sentiment volatility remains very high. Investors just don’t mind because the swing has been so positive lately.
I don’t trust it. I don’t think we’re off to the races again. I think this is just the response to December. And it’s a helluva response.
Have a great weekend, see you Tuesday. -Mike