Deal Off, Deal On
Last night the White house trade adviser Peter Navarro informed the media that the U.S./China trade deal was “over”. This sent the market into a risk off mode after it had spent yesterday grinding higher. The President then tweeted that everything was fine with the trade deal and that he hopes that China will continue to deliver on their side of the deal. The market took this Tweet to heart and resumed with risk on.
I continue to think the markets will see a correction due to the valuations of the equity markets, the uncertainty of earnings going forward and due to the pandemic experiencing an uptick in cases in the U.S., China and South Korean authorities saying they are experiencing a second wave of coronavirus infections.
The market is looking past the pandemic, focusing on positive developments such as the France PMI this morning which came in far stronger than expected.
So here we sit between a rock and a hard place. Respectful of the power of the central banks and authorities to throw whatever is necessary at global economy to combat the economic slowdown. But thinking any day, the fundamentals of high debt levels, low growth and a slow recovery will be the focus.
Brent Crude oil is still on route to close the gap at the $45 level. This will be a key test to see if the black gold will be able to break above and continue climbing or if we stay in the $35 to $45.
|Ticker||Date Opened||Entry Price||Stop||Target Price||Current Price||% Change|
|LONG Austevoll Seafood ASA (AUSS:xosl)||2020/06/02||76.75||72.00||SPREAD TRADE||74.85||-2.48%|
|SHORT Leroy Seafood Group ASA (LSG:xosl)||2020/06/02||56.75||SPREAD TRADE||SPREAD TRADE||54.80||+3.44%|
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