4/4/19 Thursday

5:46pm

The world is waiting with bated breath for news out of this week’s trade talks. Trump met with China’s lead negotiator today and afterward said that they’re close but not there just yet.

Between now and a deal-signing if the rhetoric remains positive the market will basically hold up, with I suspect sufficient buying of the dips and selling of the rallies to maintain an SP500 2850 to 2890 range. If, on the other hand, the U.S. reiterates its unwillingness to roll back tariffs as part of the deal, we’ll see downside action that’ll penetrate 2850 and some I suspect. An elimination of tariffs will see the S&P upside well beyond 2890, that is until we get a feel for the approach thereafter to trade talks with Europe. An antagonistic stance from the U.S. will see stocks notably lower, a conciliatory approach will see stocks further into all-time high territory.

After trading lower during the cash market today, the pound is rallying hard as I type. That virtually guarantees that some market-friendly Brexit news is hitting the wires somewhere this evening. Strong signs of a soft Brexit outcome would be bullish for stocks, but not nearly enough to offset any bad news on US/China trade negotiations.

The U.S. jobs number tomorrow morning will, at a minimum, push equity futures in one direction or the other before the market open. On this one, given that the Fed is presently out of the way, good news on jobs will be good news (won’t, at this juncture, spark fear of a Fed rate hike).