Thursday, August 10, 2017

How Trump's Threat Of 'Fire And Fury' Is Rattling Stock-Market Calm

‘So what are you waiting for? The S&P is still red as we write these lines. Get to work’


By Shawn Langlois
MarketWatch
August 10, 2017

Relative to the kind of action we’ve grown accustomed to lately, Tuesday’s session was a regular roller-coaster ride of volatility. Of course, it just feels that way because the stock market has been in sleep mode for weeks now.

In reality, the North Korea stuff, as one former White House staffer might describe it, has turned out to be a “nothingburger” when it comes to derailing this rally.

The Cracked Market blog’s Jani Ziedins points out that, at the highest point on Tuesday, the S&P 500 SPX, -0.04% was up 0.4% before closing down a mere 0.2%. That kind of swing would hardly even register in another era.

He used this chart for some perspective of the action, or lack thereof.



“For a while I’ve been saying that the summer’s slow drift higher will continue until something new and unexpected happened. Is this war of words between Trump and Kim Jong Un that thing? Probably not,” Ziedins said. “While consequences could be quite dire, the odds of this grudge match escalating to a nuclear war are almost nonexistent. Neither side can afford to let it go that far.”

Or, as Rex Tillerson put it: “Americans should sleep well at night.”

Yes, Ziedins offers the same message to offer investors with an itchy selling finger. “While it is new and unexpected, it isn’t really material and unlikely to derail this bull rally,” he said. “Any near-term weakness should be viewed as a buying opportunity.”

He added that the stock market could actually feel a tailwind in the coming weeks when the big money managers come back from their summer vacations and the underperformers desperately try to play catch up with the record highs.

“This is a buy-and-hold market and keep doing what is working,” he said.

In a separate post, the Heisenberg Report gave investors another reason to be hopeful, by showing what happened to stocks the last time the U.S. found itself in a geopolitical spat like this:



“So what are you waiting for?” the Heisenberg Report blogger wrote. “The S&P is still red as we write these lines. Get to work.”


Article Link To MarketWatch: