The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Trump and China.
Futures were flat and the day was boring until the President pushed out a Truth Social post that scared and confused the markets. He basically claimed that China was violating the trade agreement they had in place when Trump reduced their reciprocal tariffs from 150%. He didn’t say whether he would do anything or not but the tone was threatening and the market assumed that some kind of nasty move by Trump was in the works. The bulk of the day involved speculations about what Trump and China would end up doing. The market swung around quite a bit before doing what it usually does, dismissing the risk and going higher. Yields didn’t do much today, despite the equity movement and Fed Funds markets now expect 55 bips of cuts over the year.
The month of May was a good one for stocks. The S&P climbed almost 6.2%. The NASDAQ climbed 9.6%. The chart looks like the bull market is back and better than ever. Sentiment is very optimistic and unafraid.
While the President threw a new wrinkle into the tariff talk mix today, it was dismissed in record time. The market feels like it’s unflappable and until we see otherwise, it is. Most market participants would agree that we are *in* a bull market. The S&P 500 is now up only 0.5% for the year. The first five months chopped and flopped a lot but not it appears that the drama is behind us.
So if most of these investors think we’re in a bull market and the market is essentially flat YTD, you can bet that they are expecting a double-digit gain over the next 7 months. Get ready for some tape-chasing.
See you Monday, have a great weekend.
-Mike
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