Don't Celebrate This Stronger Week Just Yet -- And -- Is China On The Ropes Or Playing Rope-A-Dope?

While we're ultimately concerned with general conditions, and allocate accordingly, we nonetheless pay very close attention to the day-to-day developments that impact short-term market moves. 

Two reasons: One, the media, in an effort to capture our attention, often doesn't capture the true catalyst(s) for a given market move; we thus feel compelled to offer our readers what we view to be the straight unbiased scoop. And, two, we want to help our clients keep the noise in perspective, as, often -- as it pertains to our/their time horizon -- that's all it is.

With that in mind, while absolutely anything can happen in the course of a trading day, I think it's going to be tough for the market to finish this relatively strong week on a strong note. As the news on trade has, alas, dimmed markedly since yesterday:

From last night's Wall Street Journal:

WASHINGTON—The Trump White House, confident that its hard-line strategy is succeeding, is planning to ratchet up the pressure on China by focusing on new tariffs and threatening to block Chinese technology investment in the U.S., according to officials familiar with the strategy.

Business groups in Washington, D.C., have been lobbying hard, telling the White House that tariffs are counterproductive. But administration officials have come to the opposite conclusion: They believe the threats are working. “China basically surrendered [with the Xi speech] and he [Trump] is probably going to put even more pressure on them before he accepts whatever their bottom line becomes,” said a person familiar with White House views.

To try to limit domestic opposition to its tough line, the administration now is working on a program, which could cost billions of dollars, to compensate farmers suffering from Chinese retaliatory tariffs on U.S. crops. 

Well, if the WSJ has it right, the Administration is about to go at it like a boxer who has his opponent on the ropes and is about to wade in with haymakers to deliver the knockout. 

I was actually thinking that China's recent softness was more akin to Muhammad Ali's rope-a-dope (appear limp while covering up, allowing your unsuspecting opponent to wear himself out on your forearms and shoulders). But, unlike Ali, rather than coming off the ropes with a flurry, I believe China would be more than happy to see time run out and call it a draw; as would the market....

On another near-term market-concerning note, prepare for some more Syria-led volatility. Odds remain high that we'll see a military response to the recent chemical attack; the fact that France and the UK are on board makes it all the more likely...