Reflecting on yesterday, it seems that the entirety of the world’s markets was guided with little more than this:
It began, of course, with a rumor about some kind of Trump/Xi phone call. Did they talk? Didn’t they talk? Are they cool with each other? Trump says he likes him, but I wonder if that’s really true? What did Marcie think?
Then the call was confirmed which, ironically, sent markets slipping for hours in yet another “sell the news” micro-event.
Late in the day, tensions and barbed tweets started flying around, illustrating a breakdown in the relationship between Trump and “First Buddy” Elon Musk at a speed that even cynics like me never dreamed would transpire. By day’s end, Elon had declared that the Epstein files were being kept under wraps since Trump was in them (is this a surprise to anyone over the age of two?) and Trump hinted maybe he’d just chop off all of the government contracts with Musk’s companies, to which Elon in turn said he’d de-commission a critically needed rocket.
It got petty in a big hurry.
Indeed, the schoolyard spat between the world’s richest man and the world’s orangest man took $150,000,000,000 off of the value of Tesla shares in a matter of hours.
Looking at the path of TSLA since last October, it is stunning how unhinged this stock has been. During the final quarter of last year, it roared higher in a triple-digit gain to lifetime highs, then it proceeded to give back every penny of those gains, and then it pushed about two-thirds back into those gains, and now it’s in the process of giving them back again. The reduction of the mudslinging (because of, I suppose, the need for the men to sleep) has pushed TSLA up about 5% overnight.
On more serious and regularly scheduled matters, the eagerly anticipated unemployment report came out, and it continue to paint a very clear picture, even when looked at over years. Point One is that the number of jobs being created is steadily declining.
Point Two is that the number of unemployment claims is steadily rising. It seems those two facts go naturally hand in hand, yes?
Wall Street is celebrating this continuation of bad news, however, since it adds to the hope that Powell will cut interest rates, because God knows, all it will take to solve all of our problems is for 0.25% to be trimmed by Jerome.
Looking at the /NQ over the past twenty-hour hours, we can see the drama laid out in chapters:
- The Trump/Xi phone call rumors;
- The steady sell-off throughout the day, exacerbated by the Trump/Musk feud;
- The slow and steady rise all night long as the nastiness took a recess;
- The pop higher on the heels of the unemployment report;
- All of which brings us back to about the middle of yesterday’s range. In other words, staggering amounts of smoke, and not much in the way of fire.
Let’s see what madness ensues in these final few hours of the trading week!
