The rally continues.
We've been promised a trade deal and we've been promised tax cuts and the S&P has soared over the 3,000 level and is testing 3,100 with the Dow at 27,500, Nasdaq (100) 8,236 and the Russell is dragging behind at 1,603 as it was over 1,700 a year ago but no sense picking nits – this is a Hell of a rally!
Of course the Dollar has been pushed down 2% since the Fed last Wednesday and 2% of 3,000 is 60 and we're 60 points over the previous high so it would be nice to see the S&P and the other indexes REALLY make new highs without the help of a weak Dollar or trade or tax promises but these are not the kind of parents that are willing to let their children succeed or fail on their own merits – are they?
“It’s very clear we’re seeing lots of celebration in the market, not just in stocks, but in emerging market assets such as the Yuan and coming out of havens like the Japanese Yen,” said Jane Foley, head of foreign exchange strategy at Rabobank. The cut in interest rates by the Federal Reserve last week has added to investors’ optimism, she said. “The rally can extend for a one to three month view.”
Negotiators asked the Trump administration to eliminate tariffs on about $110Bn in goods that were imposed in September and lower the 25% tariff rate on about $250Bn that began last year. China has also previously demanded that Trump cancel plans to impose duties on roughly $160Bn in imports, scheduled for Dec. 15th, which would hit consumer favorites like smart-phones and laptops. At the very least, those tariffs have to be taken off the table for Xi to get on a plane to meet Trump.
Nonetheless, Trump and all the White House dwarves have been out talking up a trade deal and I think…
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