Bizarre indeed that Western media offered no real explanation for the startling market turnaround from a -700+ pt Dow loss into a +141pt gain at close.
...unless this Chinese media report is true that US has reached out first to China to discuss a trade deal.
..it took a GDP contraction to nudge Trump 2.0 into this capitulation as I opined last night that US is running out of time.
..so as it turns out, who is the "Panican" here?
..reaching out for a trade deal places the ball in the Chinese court to demand that US unwinds all its tariffs. If Trump yields, markets would be zooming towards 6k while Gold could make a move lower towards $3k. But if he does yield, he would look weak and embarrassing. I doubt at this stage that China would contemplate a middle ground 45-50% which I believe the market has somewhat factored as prospective. If one were to think about it, it makes no sense to even apply 45-50% as China is not even buying a number of US imports like beef, airplane, other farm products now. A complete unwind however would signal to all other nations not to deal with US and represents a failure of US tariff policy.
..as we saw overnight, it was all too easy to be completely BLINDSIDED; market selloff early on GDP contraction undone by Trump's capitulation to reach out to China.
Bizarro action continues.
This morning the S&P imploded -2% on the worse than expected GDP number but algos faded the crash and stocks were green at the end of the day.
After hours, "better than expected" earnings from Microsoft and Meta will likely bid futures overnight.
On the upside, 61.8% fibo at 5630 would fill the open gap from the Liberation Day crash.
And complete a head and shoulders top fully overbought. Deja vu of 2022.
