U.S benchmarks are consolidating lower in a healthy manner. The slightest signs of exhaustion crept into the market Friday with the Russell 2000 small-cap index finishing 1% from a new swing high achieved on the opening bell.
The U.S-Iran situation has deescalated, top Chinese negotiator Liu He is set to visit Washington next week to sign the “Phase One” trade deal, the Fed thwarted a liquidity crisis and earnings are right around the corner.
Iran launched more than a dozen ballistic missiles at two U.S-Iraqi airbases in retaliation for the killing of Soleimani. Fear and uncertainty immediately rattled through markets and the S&P lost 1.7% down to a low of 3181, tagging a critical level of support.
 U.S benchmarks shook off Middle East tensions and surged higher on the opening bell yesterday. The S&P turned positive by noon and extended gains into the close.
U.S benchmarks are set to open lower due to mounting uncertainties in the Middle East. Price action digested the killing of Iranian General Soleimani Friday and quickly recovered from session lows despite Iran’s promise to retaliate.
U.S benchmarks are holding steady at record levels after avoiding the feared December 15th tariffs. Although details of the “Phase One” deal remain few and far, we discussed yesterday how an actual deal took a back seat to the potential of new tariffs.
U.S and China trade relations are the underlying catalyst but there are a number of themes from Wednesday’s Fed meeting to economic data and drama in Washington that have kept Friday’s post-Nonfarm rally in check.
Yesterday was a bit of a disappointment for the oil futures bull camp as price action failed to achieve $60 and reversed all early gains. Stock index futures get non-farm payrolls.
Risk-sentiment is snapping back this morning on trade hopes after Bloomberg reported the U.S and China as moving closer to agreeing on the amount of tariffs to roll back.
Bullish momentum from the U.S-China trade narrative, stronger than expected earnings and looser Federal Reserve policy has powered the S&P and NQ to a fresh record each day this week.