U.S benchmarks are working higher from Friday’s trade scare. It was reported the White House is considering both delisting Chinese companies from U.S stock exchanges and imposing restrictions on U.S investments in China.
U.S benchmarks have been working higher since the opening bell swoon yesterday and since price action Wednesday morning held the overnight low; the range has been about 1% and gyrating higher with 3000 broadly acting as a psychological ceiling.
Fundamentals: U.S benchmarks snapped back yesterday, even as the impeachment “inquiry” on President Trump heats up. This would confirm the market is more dependent on the near-term on the U.S and China trade narrative.
U.S benchmarks finished lower yesterday, the S&P lost 0.9% and the NQ 1.5%. Selling pressures picked up as a divided country reaches a pinnacle and amidst stern comments by President Trump on trade. House Speaker Nancy Pelosi opened an impeachment “inquiry” on President Trump.
Following a mundane start to the week, U.S benchmarks got a boost for Tuesday’s session early Monday night on comments from U.S Treasury Secretary Mnuchin that talks between him and Chinese Vice Premier Liu He would begin in two weeks.
U.S benchmarks are working off the worst levels of the session; a two-sided tape, one that ripped higher on the open due to positive jawboning from both the U.S and China on trade before bleak European Flash PMIs quickly eroded the better sentiment.
The Fed met expectations yesterday by cutting rates and although U.S benchmarks swung briefly in both directions, they are right where they were leading up to the policy decision. FOMC members poured cold water over the action by not forecasting additional cuts this year.
U.S benchmarks jumped to session highs on yesterday’s close and ahead of today’s big Fed decision. For the last two months, the Federal Reserve has been fully expected to cut rates with nearly a 100% probability.