THE GREATEST TRADE DEAL EVER

-And a couple of tweets from the President:-
-“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billion Dollars…-
-…of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”-
-And then this from DOW JONES- “China considers canceling trade talks with U.S. this week after Trump threats. Canceling talks conform to China’s strategy not to negotiate under threat.”-
-This potentially matters…and matters big time. For weeks and months, we have been delivered dose after dose of positive trade deal news whenever markets were getting into trouble. Kudlow, Mnuchin and the President have been out with non-stop “everything is going great” on almost a daily basis…and now this.-
-If form continues and we suspect it will, someone from the administration will come out before the market’s open and roll back some of this tweet and again speak glowingly about the greatest trade deal in history being close at hand.This is after all their modus operandi.-
-As we write this, DOW futures are down 350. S&P down 41. NASDAQ down 125. At the open of futures, the DOW was down over 450. We gather that if nothing changes, Chinese names as well as the important “trade” names will feel the brunt. But markets have been strong. This latest pullback lasted a whopping 3 days before Friday’s strong low volume move. We were ready to tell you:-
-Major indices remain strong. Reactions to sub-par earnings and sales numbers have been strong. The 10 year remains around 2.5% even with another strong employment number. Even the RUSSELL 2000 broke above important resistance. This index has lagged the large caps but looks like it wants to play catch-up. We would like to think this tweet will not change what the markets want to do but we are dealing with the head honcho, top dog, big cheese.-
-We would love to give a guess and say this will not continue to the downside. After all, the market has been strong and not so sure this is the news that pulls the plug. But you never know. Inconsistent information out of the White House is akin to the inconsistent information coming out of Elon Musk on Tesla, only this can affect more than just one stock. You just cannot yap away for weeks and weeks telling the world that you are just a short time away from signing an unprecedented deal and then ooopsy!-
-Again, expect some sort of a rolling back of this tweet as a President who watches every tick in the market will not be happy. We long for the days when things were quieter.-