The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Headscratch.
President Trump announced 25% tariffs on cars last night and market took it in stride. S&P futures were flatish overnight and the S&P opened down about 15 points. The index swooned a little after the open but bounced back to flat very quickly and spent the bulk of the day near flat. The market didn’t, or couldn’t, extrapolate the auto tariff news to the rest of the market. For auto makers, Tesla was the big winner and Ford and GM suffered. Treasuries didn’t do much either today and capital flow was very light at 85%.
So we got the auto tariff reveal and markets did bupkis. Considering that nobody expected the auto tariff to be announced, it’s very surprising that the market barely reacted to the details. I guess it’s impossible to guess what the 25% auto tariff will mean for other industries and their tariffs so investors just stood pat. No reason to buy or sell if you have no inkling what’s to come.
Without a fundamental reason to act, the trading day was the product of the intraday momentum players and the chartists. There were a couple of intraday runs, but they were mild. There seems to be a battle around 5700, but it’s minor. In looking for clues about the next 2-3 percent run, today didn’t tell us much. We’re going to have to wait for a catalyst again.
And lo and behold, we should get some soon. Tomorrow Feb personal income and spending, along with U Michigan survey results will inspire markets to speculate about the slowing economy. Next week’s tariff announcements should be the biggest catalyst but maybe nonfarm payrolls data will shake things up too.
So get busy waiting because if there’s going to be action, it’ll probably be rooted in breaking news or data. The chart-based influences and intraday antics seem to have run their course.
See you tomorrow.
-Mike
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