Broad, Modest Gains
If you’ve been waiting for a deeper dip to buy stocks, you may have missed your opportunity, at least for the time being. Stocks were up this morning despite a portion of the yield curve inverting again. The Dow was up above 26,000 before retracing slightly, the NASDAQ climbed 0.6%, and the S&P 500 was up over half a percent.
The positive returns come on the heels of President Trump’s hints yesterday that trade talks with China may resume soon, and despite denials from unofficial Beijing mouthpiece the Global Times, stocks rallied modestly. Beijing reiterated its claim today that there have been no new conversations with the US, but investors are choosing to believe Trump over China.
Consumers Reject Recession Narrative, Trump vs. Central Banks
Despite warning bells from central banks, consumers continue to be confident. The Labor Differential indicator–a poll on sentiment concerning availability of jobs–is near 1999-level highs. Consumer confidence dipped slightly versus last month, down to 135.1 from 135.8, but it’s still in rare air.
Central banks routinely manipulate markets. When they admit to doing so, it’s usually to avoid market crashes. When they don’t admit to meddling, the motives are often political. President Trump knows this, so the moves he makes in public and behind the scenes with the Fed and global central banks warrant close attention as the election draws nearer.