The major equity averages are rallying at the open this morning: The S&P future contract, while already in the green, popped higher on the higher than expected weekly jobless claims number; i.e., bad news remains good news for now, as it bolsters the case for Fed easing going forward.
Indeed, the notion that the Fed can rescue the market could fuel a real test of the recent highs: My best guess is that that – without a change of tack on trade negotiations – would turn out to be an ugly bull trap. The latest sentiment readings (generally not bullish) means that there is definitely money out there to buy stocks, exacerbating a rally should short-term technical patterns suddenly resolve to the upside. Again, without the ultimately-monster trade war headwind abating, we can have zero faith that the present expansion, and, thus, the present bull market, has the legs to last.
If, however, the powers-that-be come to their senses before odds begin to favor recession going forward (not there at this point), I’ll be a raging bull for the foreseeable future. Simply can’t go there until they do…