This Morning's Log Entry

8/1/19 Thursday

Yesterday saw the market take a dip when Fed Chair Powell didn’t offer up the promise (or enough of one) of future rate cuts traders were hoping for. Equity futures are coming in flat at the open this morning.

We still have earnings to wade through and the jobs number tomorrow to finish out the week.

Going forward we’ll see the market continue to move on economic data; the bad sparking rallies, the good inciting selling, as equity traders remain desperate for lower interest rates.

I don’t suspect that the prevailing bias (upward) in stock prices is ready to give up the ghost just yet. However, the underlying trend (the fundamentals) will continue to deteriorate as long as the U.S. government continues its campaign to disrupt established trade norms and global institutions; which hugely disrupts supply chains, corporate expansion plans, and so on.

While, again, I don’t suspect that the economic expansion, and the attendant bull market in stocks, is yet ready to fold into the next recession, and the attendant bear market in stocks, I do believe it’ll be here far sooner than it otherwise would have should the Trump Administration not – sooner than later -- pivot, big time, in a business-friendlier direction.