The Gilmo Report

June 27, 2018

June 27, 2018

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.

The rest of this report is available for Gilmo Report Members only.
The full report will be available 45 days after it is posted. For immediate access: login or subscribe

Gil Morales & Company, LLC (“GMC”), 8033 Sunset Boulevard, Suite 830, Los Angeles, California, 90046. GMC is a Registered Investment Adviser. This information is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to GMC, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Gil Morales & Company, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2008-2018 Gil Morales & Company, LLC. All rights reserved.