The Gilmo Report

June 9, 2019

June 8, 2019

News remains the primary driver of this market, and we’ve seen all manner of headlines push the indexes to and fro this past week.  Tariffs on Mexico, tariffs on China, delayed tariffs on either, talk of the FTC and the DOJ coming down on big-stock tech “monopolists,” Fed heads cooing dovishly, and a weak jobs number on Friday were all elements of this basic equation regarding a news-driven market.

The rally over the past four days, however, has fed (no pun intended) on the idea that the Fed must begin lowering rates soon. Friday’s weak jobs number of 75,000 vs. estimates of 180,000 coming on the heels of Wednesday’s ADP report of a meager 27,000 new jobs all helped to reinforce this. Interestingly, however, the futures sold off following the release of Friday’s jobs number only to rally on news of a delay in tariffs on certain Chinese products.

Perhaps after further consideration, the market decided that it liked the possibility of easing trade tensions with China combined with a weak economy that could very well bring the Fed to lower rates. So, the indexes took off, with the NASDAQ Composite Index leading the way among the Big Three Indexes.

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