E Market Briefing For Wednesday, June 12

Here we have uncertainty about fundamental factors that will impact market behavior. Markets dislike vague prospects, so you get the roller-coaster. It's a backdrop that invites hedging or just fading (inverse) initial reactions to all the news (or lack) that's evolving over the two weeks just ahead. The worst case would be a lack of eye-to-eye thinking with China (though we concur it won't be the actual outcome, even if we have a deal); and then the US leans on the EU (particularly German automobiles). Markets wouldn't be pleased.  

  

All of this does enhance companies likely increasing US centric production; and we think that's already an ongoing trend. You don't need tariffs to close down anything; just the awareness they're in the armamentarium works well enough for Washington. Even some staunch Trump haters recognize there are attributes of trade (if not migration) policies that have merit. That's why a lot of Congressional leaders are saying it's the 'style and threat approach' so disdained. Well they say we don't negotiate that way. But the U.S. did, and so far, to a degree, it's working (if indelicate at times). The people take note and realize the bar is set for the future (more focus on growing the U.S.). It's a trend that may to some degree prevail even after this Administration.

Conclusion: stay nimble; realize we've basically had our expected rebound in June; and that whether or not it extends further depends on news. This is likely to be a more significant influence on the technical picture ahead, than the swings we've seen over the last few months; which were largely focused on technicals, with the news being the backdrop; not so much instigator (of course aside the knee-jerk responses to tweets and so on). S&P resistance and support levels and again resistance appeared about where they should; but now that can be variable (influenced) due to crucial trade news.  

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