Cleaning up after the China Trade Summit Looks Exactly Like I Said it Would

The Great Recession

That didn’t take long. On Saturday, well before the US stock market opened post-China-trade-talks, I wrote:

The next step for the market would likely be that the remaining stock indices that have not pushed past their own previous peaks would now punch through. By that … I meant those indices like the Dow that were very close to breaking past their old heights

“Best-Case Scenario Has a Worst-Case Twist“  

No surprise. The very day the market re-opened, the Dow pushed intraday past its previous record and then failed and ended the day lower than it began. I won’t be surprised to see it try again, but it won’t get far beyond that point, and probably won’t hold long because …

More importantly, I wrote:

With the Xi summit being something Trump can trumpet about for one or two toots, I would not be surprised to see the Dow break through its past ceiling due to the market’s relief that the G-20 did not result in tariff escalation that had been threatened. However, I also gave a major caveat in my best-case scenario, so hang on: “Well, the market has clearly already priced in a trade agreement being reached — also, with apparently 100% certainty — so hope won’t buy a lot more headroom at the market’s top because it’s the same hope that investors have been spending all along….” That means the market likely gets a boost as it raises a cup of cheer to tariff relief…. That will be short-lived.

Well, it was even more short-lived than I thought it would be. While the S&P 500 scratched out a new record, the Dow didn’t even hold through the day, and both are starting today in the red.

Read the rest here: The Great Recession