"We're not quite at the point where the trade war has descended into a "who's on first?" style farce, but it's getting close. Was there a phone call and rapprochement between the U.S. and China over the weekend? It depends on who you listen to. That doesn't exactly make for an environment that's laden with edge for traders and investors, now does it?
While the normal prescription might be to look through the noise, clearly that's pretty much impossible at the moment. For better or for worse Donald Trump can move equity markets in the blink of an eye, and you have to say that he seems to enjoy using that ability. Meanwhile, the volatile trajectory of the trade war does seem to be putting the real economy at risk, at least judging by the descent in PMI readings. Let's see if today's durable goods reading provides a similar message."
As for the durable goods report, it came in mixed: The headline read beat expectations, but was weaker than expected ex-aircraft. As for the all-important capital goods number; it too came in better than expected, but was also a bit weak ex-aircraft. Core capital goods shipments shrank by -0.7%.