D&D Note (5.29.2020) ~ Markets Relieved Trump Maintains Trade Deal With China ~
Once the news hit yesterday that President Trump was to have a press conference today on China, markets had been under pressure and traded lower from futures into cash trading.
The rotation we saw this week reversed with money going back into Mega Cap tech and stay at home trades.
Ahead of the press conference the markets were in a risk off mode with stocks down and bonds up. The uncertainty of what Trump would announce kept markets nervous throughout the day.
News broke during trading that Trump wasn’t planning on quitting the Phase-1 China deal and helped push markets higher pairing losses leading up to the speech.
Once Trump began to speak all major indices fell with the NASDAQ also falling into the red after trading in the green.
The President announced the US will terminate relationship with the WHO, will take action to stop entry of some foreign nationals, and eliminating the special treatment policies for Hong Kong.
Following the press conference and Trump not announcing any change in the trade deal with China, markets rallied back into positive territory.
DOW down -0.07%
S&P 500 up 0.48% (3044.31)
NASDAQ up 1.29%
VIX traded choppy throughout the day at elevated levels but then dropped down post press conference -4.30% to 27.36
Oil rallies in best month on record. NY crude surged in final hour up 4.36% to $35.18 a barrel.
Last night America all saw the protests and the city of Minneapolis on fire over the death of George Floyd. Today the officer was charged with third-degree murder and manslaughter.
Consumer spending (the driver of the American economy) fell a record 13.6% in April.
FED slows treasury buying to $4.5B a day down from $5B a day.
Cannabis stocks were under pressure today after Canopy Growth reported a loss of C$1.33 billion as the company books impairment and restructuring charges.
Two-thirds of public restaurants are seen at risk of bankruptcy due to Covid-19.
New York City is on track to begin reopening June 8th.
Global Virus cases: 5.87 million+
Global Virus deaths: 362,769+
US Virus cases: 1.73 million+
US Virus deaths: 102,323+
~ Dave James / Principal Trader and Market Strategist