Wheee, what a fun ride this is!
Things were going along nicely for a while but, this morning, China announced they will be retaliating against Trump's tariffs (as opposed to some fantasy World people live in where China takes Trump's crap lying down?) with tariffs on $75Bn worth of US Goods (which the US will pay for, of course) AND a 25% tariff on US autos beginning Dec 15th.
Don't worry though, Powell is making a speech at 10am from Jackso Hole and it's widely expected he will wave the money wand and "fix" things so we'lll take this pre-market dip about as seriously as we took the pre-market rallies this week – just more nonsens to make the Futures trades money. Like this morning, we can go long on the S&P (/ES) at 2,900 as it should at least be bouncy and tight stops below the line, of course. S&P Futures pay $50 per point, so it could easily be good for a quick $500 per contract.
The same goes for the Russell (/RTY) if it gets back over the 1,500 line – that makes for a good long bet too but only with tight stops below and only looking for a quick gain as it's too risky to hold into Powell's speech as there's little he can do but disappoint as the expectations are widely held now that the Fed will drop rates 0.5% when they next meet on Sept 18th and I don't think that's realistic.
The theme of this year's Fed Conference in Jackson Hole is "Challenges for Monetary Policy" and that seems like a bit of an understatement at the moment and Powelll's speech has the same title so there's not much to do but get ready for 10am and see how things shake out after his speech.
Have a great weekend,
– Phil
