Last week at this time we were scratching our heads about how a market can elevate in the face of such tragedy. Arthur Laffer probably put it best when he said on the surface money/markets have little to do with morality. But eventually, morality will catch up to the markets. Markets had a similar sentiment when it came to the hurricanes. Initially, markets were resilient when the hurricanes hit.
This couldn’t possibly be good for business. We are coming to the point where this group is going to boycott those products and that group is going to boycott these products. I heard Maria Bartiromo say with the decrease in ratings, the advertisers will be paying out less. That’s just the start of it because the horses really got out of the barn yesterday.
Our yesterday's neutral intraday outlook has proved accurate. The S&P 500 index gained 0.1%, as it extended its consolidation along the 2,500 mark. The market may continue to fluctuate today. On the other hand, the support level is relatively close, at last week's Tuesday's daily gap up of 2,488.95-2,490.37. Therefore, we still prefer to be out of the market, avoiding low risk/reward ratio trades.
After stocks and the dollar surged on Tuesday, following a Politico report that Trump’s team have taken a significant step on tax reforms, the President’s threats on Tuesday night to shut down the government and terminate the NAFTA agreement, were not well received by investors, who responded by dragging both equities and the dollar lower.