evening wrap

market vibes

“Every crowd has a silver lining.” Phideas Barnum 1842

Up down up down… but generally a quiet day in NY. Scott Bessent has been working overtime to keep a calm and steady tone in the markets. Trump gets the blame when stocks go down, and Bessent gets the credit when they go up. That’s fine.

By his reckoning, a deal with South Korea may be done and dusted next week. South Korea is probably the lowest of low-hanging fruit; our military guarantees their liberty … but it’s a point on the board.

The he-said-she-said Chinese/US trade talks that didn’t happen happened today at lunch with the Norwegian Prime Minister, according to another BBG report. Both US and Chinese trade delegations were present… So funny. China called the reports “groundless fake news!” Then added, “The US must drop all tariffs against China.”

In other news, China and Europe are exploring a bilateral trade deal, which is absurd. They are both exporters with high tariffs and stiff non-tariff barriers facing each other now. Sort of like two trannies getting married and trying to have kids.

The Federal Reserve’s Christopher Waller said in a BBG interview tariffs would be a “one-time price event,” and he didn’t think tariffs would be felt until July. Plenty of time for huffing and puffing. “The question is, what are the things that would cause this inflation to persist through the initial tariff increases? And I have a hard time seeing exactly what that would be.” Mr. Waller, allow me to present Mr. Powell.

Separately, Canada’s Carney warned the US not to toy with isolationism. As for Ukraine, the deal is stuck on Crimea, which Zelensky-NATO cannot hold (no money), and neither will Putin ever give it up.

In the markets

Stocks rallied because I don’t know why. They just did from the get-go on extremely light volume. There is a well-formed rising wedge that should break above 5520 (maybe tonight) and fill that little gap.

There is obviously a cohort of bulls determined to dominate the daily auctions since Tuesday with calibrated TWAPs bell to bell. And to me, obviously, the point is not so much to buy a lot of stock because very low volumes of stocks are being traded. If this were a serious move, we’d hear the usual sonic booms. In my opinion.

In other equity news, NFLX made all-time highs. GOOG had a revenue beat and rallied 6% on the news. The Dow lagged. NDX took the lead.

June gold rallied $50 in Asia, stayed $50 higher in London, and stayed $50 higher all day in NY. Volume at ordinary levels. “At the sound of the tone, leave your deal.”

Not to be outdone doing nothing, silver closed at $33.55 yesterday, opened at $33.55 today, and closed at $33.55. Copper and platinum spent the day at the highest prices since April 3.

In other markets, bonds and FX traded inside ranges on very light volume. Oil was $0.50 higher for most of the day on very light volume.

Bitcoin closed on the highs of the range but down a few bucks on the day… on very light volume.

My vibe

The stock market is all alone, way out ahead of the board, and it is relatively cheap. Very thin. Bad breadth (sounds funny but true). Bonds are cheap for a reason. Oil is cheap, and the President is determined to see it lower. The dollar is cheap, like bonds, for a reason. Bitcoin is just cheap, even though it’s almost 30% off its lows. Gold is cheaper but not at all cheap, and gold is the only true-blue trend.

I suppose prices are low enough to ignore the bad narratives and abysmal unknowns. Chris Waller thinks a weak GDP and a weak NFP would justify a cut. Some traders are thinking as soon as May. The question is whether a recession cut is a bullish cut. You decide.

If you’re looking for risk, there are risks you can take. However, none of these markets have the gushing force of 2021, or the ‘90s, or the teens, even, and the teens were hard. This is a fun zone with no one in it … except you if you have a position, and the that guy in a checkered suit.

Marty Zweig’s 17 rules. Always a worthy read. I refer you to rule 11.

first ball in

extra credit

Night all…Good luck in Asia.

JJ

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