The indexes ended off session highs, they still ended in positive territory. They were far, though, from recovering the losses in the session the day prior. Trade uncertainty is still weighing on investors and traders’ minds, Trump again unleashing his vitriol yesterday. Day trading chat rooms were abuzz with the harsh words directed at Harley Davidson, considered one of the most prestigious and renowned American brands. The motorcycle company had responded to the latest tariffs by announcing that it would simply redirect production abroad. Trump was irate: “A Harley-Davidson should never be built in another country-never!” Not one to hold his punches, he added, “Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!”
As Chief Executive, this president has chosen to exercise powers that few if any of his predecessors sought to exercise. Trump sees it as pandering to his base, being tough towards China, protecting workers in much needed electoral districts. Tariffs by their very nature diffusing the brunt of economic measures, Trump has been betting that consolidating his base will grant him another term in office. For now, the damage the market has suffered has been checked to a certain degree; and the truth of the matter is that the same way that human nature can be unpredictable, this market too has been just that.
The best day trading course can tell you which patterns are most significant, which candle series are indicators of future likelihood, how to gauge resistance and support levels and hot to correctly set puts and stop orders. Nobody, though can have the gall to say that the day trading training they’re giving you can predict what will happen in the market from one day to the next – especially when it’s a mere tweet, be it about cars, or motorcycles, or limits on technological imports – that is shaping the market more than anything else. It is clear as day that 5 years from now the market will almost definitely be trading at a higher level than it is now, and all the more so 10 or 20 years down the road. But what the market tries to do from one day to the next is correct or fine-tune the perception traders and investors had the day before; bad news, correction-buying computer algorithms notwithstanding, will prompt traders to believe that the value placed on the market the day prior exceeded its newly revealed value. And when it comes to profit-making companies, in theory, after an additional day of operations, they should be worth more. It’s just with Trump’s spate of tariffs, and protectionist measures, which almost invariable lead the global economy to contract, there’s no way to rationally justify higher equity prices, unless individual companies themselves relay news that points to better company growth.
And more than anything, that’s the dilemma companies and investors are facing now. We’re seeing record buybacks on the part of large tech firms. Companies know that with the market correcting stocks don’t adequately reflect each share’s true value. The fundamentals are there given record growth; it’s just that this Trump headwind doesn’t seem to go away.
As reported by Barron’s, “Further tariffs on additional $200 billion of worth of Chinese imports could reduce real GDP growth by roughly 0.2 to 0.3 percentage points and boost core PCE inflation by roughly 0.15 percentage points.”
The day’s leaders were tech stocks and small caps. The NASDAQ rose about 0.4%, the Russell 2000 climbing a tad under 0.7%. The S&P 500 and the Dow gained 0.22% and 0.12%, respectively.
Deutsche Bank chief international economist, Torsten Sløk, noted, “It is striking that the significant tailwind from corporate tax cuts is now being offset by other forces, most likely the uncertainties associated with the ongoing trade war.”
Today’s Hot Stocks: WWE, HAL, APC, AVAV, SONC, GE
Have a great trading day!