Market Direction: BEARISH alert
issued 10/3/2019
What is the current stock market direction?
Vote BULLISH (Up) or BEARISH (Down) in the upper right side bar, the current stock market direction weekly closing numbers. Leave a comment. Now for the news…
The economy
Actions speak louder than words, unless of course we're talking about trade negotiations between the U.S. and China and Brexit negotiations between the UK and EU. In those instances, words are resounding today like a Michael Buffer call to boxing action.
All it has taken to rev up the futures market is a characterization by President Trump that yesterday's trade talks went very well and an indication from an EU spokesperson that eleventh-hour negotiations between UK and EU Brexit negotiators have been "constructive."
Those views are the basis for why the futures for the major indices are up sharply, as they are providing some hope that worst-case scenarios, or scenarios with a worsening position, could be avoided for the time being.
Currently, the S&P futures are up 27 points and are trading 1.1% above fair value. The Nasdaq 100 futures are up 79 points and are trading 1.1% above fair value. The Dow Jones Industrial Average futures are up 258 points and are trading 1.1% above fair value.
The popular line in the press this morning is that the U.S. and China could be on track at least to reach a light trade agreement that forestalls the implementation of additional tariff increases. That agreement might include a currency pact of some kind, a commitment by China to step up agricultural purchases, and/or a relaxation of U.S. restrictions on doing business with Huawei.
What it won't include, or so it is thought, is an agreement to resolve the structural trade issues that got the tariff fight started.
The fact that the futures market is as fired up as it is goes to show just how anxious market participants have been about an escalation in the tariff fight. They will accept any semblance of good news and cheer the ability to make it out of these trade negotiations without any knockout punches having been delivered.
We're not saying that is the stuff of major rally material, like we might witness at the open, yet there is a proclivity in the market sometimes to move mindlessly with the tape out of fear of missing out on a rally effort and trailing one's benchmark.
This is a sentiment-driven rally and nothing more, because, well, the market knows nothing substantive right now. It could turn into something more substantive by the end of the day, however, or it could all unravel in a hurry.
President Trump is scheduled to meet Vice Premier He at the White House at 2:45 p.m ET for a meeting scheduled to last 85 minutes, which would take it just past the close of today's trading.
Unfortunately, that means market followers will be beholden to another day of fast-twitch reporting of the status of negotiations that comes most likely from unnamed sources.
Be that as it may, the market is fine right now with all of the words that have been uttered that suggest a light deal at least is possible and will live to fight another day insomuch as it relates to ongoing efforts to get to a complete deal or, dare we say, another period of escalation that negates any light deal that might be struck today.
We're sorry to drone on so much about this trade matter, but it is this matter that matters most right now to the stock market -- and words clearly matter more than actions before today's open.
Separately, the Export and Import Price index for September was released at the bottom of the hour. It showed export prices down 0.2% and import prices up 0.2%. On a yr/yr basis, export prices were down 1.6% while import prices were also down 1.6%. This report hasn't had any impact on the market.
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The market direction weekly closing numbers for the indexes this week compared to the initial BEARISH recommendation closing numbers:
Stock Market Closing Numbers
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compared to Recommendation Numbers
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10/3/2019
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10/11/2019
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Difference
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26,201.00
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26,816.59
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615.59
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7,872.27
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8,057.04
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184.77
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2,910.63
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2,970.27
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59.64
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