Tencent Record High & US/China trade “intact” - DAILY MARKET UPDATE

GURU WISDOM

Win or lose, everybody gets what they want from the market. Some people seem to like to lose, so they win by losing money. – Ed Seykota
 

US / China trade

Traders look emboldened after surviving a brief sell-off on Monday that ultimately ended in most global indices heading higher. White House trade adviser Peter Navarro implied late Monday that the US-China trade deal was “over” but walked back the comments hours later. He was later backed up by US President Trump who called the deal “intact”. 

The Navarro episode gave an unexpected example of how important the phase one trade deal is for both markets and for the Trump administration. We might conclude that whatever threats might come from the US, the deal is stable and downside risks to markets via US / China trade look negligible.
 

Coming Up…

On the economic calendar for Wednesday we have the RBNZ rate decision, German IFO, SNB Quarterly bulletin, EIA crude oil inventories and the Fed’s Evans and Bullard giving speeches.

WTI crude has filled the large weekend gap* made between March 6-9 that set the course for heavy declines afterwards. 

*Filling the gap is popular day-trading strategy that normally plays a lesser role in longer term price action. In the strategy traders will buy a stock after it gaps down and and sell out either when the gap fills or when the day closes.