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Dull End to a Volatile Quarter

06-28-2019

The indices were modestly higher through midday, although the action was rather muted. In the afternoon, the indices bounced around but went nowhere. With an hour to go, when I had to leave, the market was still just slightly higher.

Away from stocks, green paper was a flat, as was fixed income. As for the metals, last night gold was almost 1% higher, but gave up that rally and actually turned negative in New York before getting back to unchanged and flopping around. Silver followed a similar path, but the action was much milder. The miners were slightly higher.

No G-20 Guesswork Required There is no point in doing a lot of speculating about what comes out of the G-20 meeting this weekend, because we will be able to see for ourselves by Monday. It seems like expectations are impossibly high, both for what the Trump administration might be able to accomplish on the trade front, and for the second-half rebound. I really believe July has a chance to be quite negative, with earnings problems and QT still underway, but having said that, nothing negative has really mattered much so far this year.

It is entirely possible that folks will believe in a second-half recovery all the way until the fall. I don't think that is how it's going to play out, but it could. Suspending disbelief has worked so well that any short positions or put positions have to be smaller than usual until it is clear psychology has started to changed.