ALL ABOUT THEM TARIFFS
On 3/11, we wrote that markets were about as stretched, extended and oversold as a market gets. The thought process was some action to relieve the condition. But instead of a big bounce, markets just backed and filled. A couple days teased another drop through the floor and a couple days teased higher.
And then came late Friday and this weekend. Late Friday, the floated story that the tariffs coming up would not be so onerous. The DOW bounced from a 500 point drop. And now this headline:
WHITE HOUSE SCALES BACK APRIL 2 TARIFF PLAN, FOCUSES ON TARGETED LEVIES – WSJ
Keep in mind, this is not the WSJ floating a headline out of thin air. It comes straight from the top. Will he change his mind again? We think (actually hope) he is learning that markets are not friendly to tariffs or is it tariffs not friendly to markets? We now expect some reciprocal tariffs but the big stuff? We can only hope there will be no big stuff.
This morning:
On the open, the DOW up 1%. The S&P up 1.25%. The NASDAQ 100 (QQQ) up 1.4%. Doesn’t sound like much but for where the indices are…it matters. 2 weeks of backing and filling turned into flattish action after the vicious drop. Indices will now open up ABOVE recent highs. If price can take out the past two week’s highs, that will be a start.
Keep in mind that the average stock has been much, much worse than the big indices. They have crushed everything consumer, transports, housing, semis and so many other areas. We’re all for a V-shaped move back up but the norm would be some stairsteps. Important juncture at hand.