Let’s just summarize the Dow Jones Industrials (DJI) gaining about 600 points and the CBOE S&P Volatility Index (VIX) dropping into lower levels (but not likely to stay there for a very long time), writes Gene Inger Friday night.
And both credit markets and the dollar not significantly changed; while many technology stocks were softer.
Amid the persistent political scandals (including pay-for-play, or influence peddling or any other such embarrassments whether to AT&T or others), it is also an environment of movement to improve regulations, stimulate business, but sort of turn blind-eyes toward persisting systemic concerns.
Diversion or not, the president’s drug price speech does talk of seriously restructuring an entire leg of the economy, and probably we all agree that is necessary.
The reality is it will take months to see how this goes and is also a way of conveying what the people want not lobbyists for drug and pharmacy benefit managers, on either side of the aisle.
In-sum: We have a form of suspended animation above the former battle of a descending triangle and a bearish capitulation in the wake of S&P 500 (SPX) upside resolution.
Follow-through appears greater than breadth reveals, because many of the narrow universe of leaders are consolidating while a lot of smaller-cap stocks are trying to shoulder the burden, plus Oil too.
They want to build on this.
Although absent leverage or even lower rates, it’s likely to become harder to get the impetus revved-up going forward for long.
The Middle East remains tense.
Even as Iran says they’d prefer to avoid regional war, their clerics are threatening destruction of Israeli cities which isn’t exactly going to calm residents of Israel who remain on-edge.
This is that stage where you did get a short-term bullish resolution, but at a high level. That’s where to catch-up from the already-corrected.
AT&T (T) is declining on the embarrassing news of the influencing efforts on the proposed Time Warner (TWX) merger.
This is an example of stocks that already corrected a lot in recent months. For sure that does not prove a base built yet, but hints at contrasting value of actual value stocks versus the FANG + types that mostly are fading a bit or just hanging-out at high levels.
