sp'daily5
VIX'daily3
Summary
US equities opened significantly lower on yet more trade concerns. Ongoing trade chatter from Trump, and early morning news of China retaliatory tariffs didn't help, with the market spiraling lower across the morning and continuing into mid afternoon.
Volatility picked up, with VIX 21.32, and settling +28.1% at 20.55. However, that was notably far below the early Thursday high of 23.38.
Irrelevant trade tariffs
China announced new/updated tariffs on 2,493 of US goods, set to begin June 1st.
2,493 @ 25%
1,078 @ 20%
974 @ 10%
595 items to remain @ 5%
The early morning headline was 'Tariffs on $60bn of goods', but lets be clear, we're really only talking about (at most) around $10bn of increased tariffs.
Sorry, but the numbers we're dealing with are entirely IRRELEVANT for a $20 trillion US economy. Yes, some individual companies will have significant issues, but for most... its a non-issue.
The mainstream have little to no perspective on this, although that in itself shouldn't be surprising. If you think trade tariffs are the 'key to this market or economy', you're looking in the wrong direction.
I would accept there are secondary issues, not least one of confidence. Economic and market CONfidence is a very important issue, and its one reason why we've cooled from sp'2954 to 2801. For now, the US/China trade war is arguably just a skirmish, and I still expect an eventual agreement.
Until I see a bearish monthly close (most indexes settling under the monthly key 10MA) and a rate cut, I continue to see any cooling waves as such.
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| How much is the tariff on this one? |
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| A moment of peace |
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| Full moon is just after opex, this Saturday |
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Goodnight from London
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