The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Quite a recovery.
Futures traded off 40-50 points overnight and things were looking poor as we approached the open. The S&P opened down 60 and worsened over the first 15 minutes. Liberation Day concerns swirled and markets worried about what the coming announcements might be. The White House later announced that the tariffs would be “country-based” and what that is not self-explanatory, it gave comfort to the markets. As the tape clawed back the morning losses, upside momentum built and once the S&P broke above flat, you could feel the longs exhale in relief. Capital flow was a bit elevated at 104% so investors were fairly active during today’s reversal. Treasury yields fell small over the session.
Today was a good turn for the bulls. Sentiment was borderline awful at the open and shortly thereafter. As far as substance goes, we didn’t get much. The price action was psychological mostly. That doesn’t mean we can, or should, dismiss it either. It just means that in the current emotional environment, we were ready to bounce, and without further bearish fundamental catalysts, we could and did bounce.
The details of the Liberation Day tariff announcements will be significant to the market but as we wait for those details, it appears that sentiment will not sour further. We’ve hit a pause in the worry and maybe we’ve even found a little sentimental opportunism.
Don’t read too much into the price action until after we get the Liberation Day info.
See you tomorrow.
-Mike
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