The market started the week out on a decidedly negative note after the Wall Street Journal reported that the Trump Administration was planning to impose restrictions on Chinese investment in U.S. technology companies. This sent the futures down sharply over the weekend, leading to a big sell-off on Monday.
After stalling and churning yesterday on a reaction rally attempt, the indexes looked set for another cliff dive this morning when overnight futures were down big. But Treasury Secretary Mnuchin went on CNBC at 8:00 a.m. Eastern time to clarify that restrictions on Chinese investment in U.S. tech companies would be done via a Committee on Foreign Investment in the U.S., which will be known acronymically as CFIUS.
This was interpreted as a softening of the Administration’s hardline stance. The futures quickly did an about-face, and the market was off and running to the upside once the opening bell was rung. For those of you who follow me on Twitter at @gilmoreport (which you should, frankly), the whole thing smelled bad to me, so I decided to press on the short side into the rally.
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