It’s Lucy-and-the-football all over again, and traders are flat on their backs wondering what the hell just happened.
Trump happened, that’s what. He just put the markets on notice – the “Trump Always Chickens Out” tariff reversal “TACO trade” is finished. You might not know if from the action on the surface; there’s still some manic movement out there, but it’s really just a doomed game of musical chairs with fewer and fewer seats to grab.
Because TACO or no, the market’s internals are absolutely brutal right now. The advance/decline line looks like trash and correlations are breaking down. And the cherry on top of this #!%& sundae is the bond market, throwing its weight around just enough to screw up everyone’s risk models.
With all that teed up, we’ve got earnings coming up, too. They’d better be stellar because the market’s running out of hopium and volatility won’t stay dead forever.
Let’s get right into it…