US Commerce Secretary Wilbur Ross just said there's no "level of the stock market that's going to change policy." Those are some very strong words. The White House is telling you to expect stock market downside which counters last week's media reports that the administration backed off after seeing the market down.
CNBC reported more fun quotes from Secretary Ross today. He also said, "There will be some hiccups along the way."
Hiccups? He knows. That's not very bullish. We need to take heed.
We don't remember the White House ever warning Wall Street for an impending downside. Anybody remember that? That makes it tough to be bullish.
As you know we turned cautious on markets last Monday thanks to these trade issues. That was after being big tech bulls for a while. On Monday we said, "We've had monster moves in our Buys if you've been following us... This accelerated uncertainty is as good a reason as any to step aside."
On Wednesday we expected a "tough next few days" for stocks specifically tech stocks. Tech stocks have huge exposure to China.
For now, we see stocks in a technical downtrend over the last week or so and the macro news is confirming that downtrend.
We don't have positive earnings news to save the day for about another two weeks so the trend looks down ahead.
Conclusion
When the White House flat out tells you to watch out stock market I think it's fair to take heed. It confirms our first cautious notes from last week after being bullish for a while.
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