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PRE MARKET LOTS OF NOISE

—-So…the president inadvertently rolled back his “fibs” on tariffs yesterday as he abruptly changes his mind on very important products. In his own words, he states that he is worried about the costs to consumers during the holidays because of the tariffs. Again, tariffs are paid by the importing business who has a choice to eat the cost or pass it on to consumers. Case closed.—-
—–We do not pretend to be Milton Friedman but we do think we have a pretty good feel for what is going on in the economy, not only here but around the globe. For the past year, we have stated we are much more worried about Europe and Asia. The worries are coming to fruition as for starters, Germany is now looking to be in contraction mode. Due to the fact that Germany is perceived to be the engine of Europe, it begs the question what about the rest of Europe? China? We don’t believe a word that comes out of China on their numbers but leave no doubt, their economy has been heading south.—–
—–This leads us to the U.S. economy. Our stance has not changed. We have believed growth was slowing but not to the point of real trouble. We are now entertaining trouble. We suspect the slowing of global growth is affecting. We suspect the confusing and ever-changing policy of this president is affecting. We suspect the diminishing effect of central banks is affecting. We suspect the asinine, asiten, aseleven out of control government debt is affecting. (Did you hear that Kudlow…who used to abhor debt and deficits but now thinks they are no big deal?) Stay tuned. The bond market is now screaming at the top of its lungs that softness lies ahead. These interest rate moves should not be shrugged off. ——
——The president, for the umpteenth (don’t even know if that’s a word) time, changed his mind abruptly yesterday. Markets jumped on the latest change of stance. But to our eyes, we suspect there is more time and price for this correction. How long? Don’t know. How bad? Don’t know. We just believe the upside is limited here as foreign markets act terrible and our market remains below resistance with many areas in their own private bear markets. At the very least, we suspect things will remain “mushy!” If at any time the big 4 large cap indices break below the 200 day moving average, look out as that will only invite some serious institutional selling as they recognize another important level has been given up. So far, just a less than thrilling correction.—–
—–We have been to Hong Kong on more than a few occasions. It really is one of the great cities of this world. Do not underestimate the seriousness of what we are all seeing in real time. We keep our fingers crossed for the best but fear the worst as China is showing they want to take over in every way, shape and form, 28 years before “the deal” between the two was set to expire. —–
—–Next up…more rate cuts! Yipppeeee!—–