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Can the Market Continue Its Rebound Amid Growing Trade War Fears?

Stocks blitzed higher from steep overnight losses

By Anthony Mirhaydari, InvestorPlace Market Strategist

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U.S. stocks blitzed higher from steep overnight losses as the U.S.-China trade war went hot, resulting in a near 1,000-point swing in the Dow Jones Industrial Average. Both countries unveiled specifics in their respective tariff packages totaling some $50 billion each. Now the U.S. is trying to dampen the notion of a trade war with China.

Why did stocks rebound? Because of the full-court press by the establishment: “QE4” diva James Bullard, President of the St. Louis Fed, was out talking about how interest rates didn’t need to rise further since wages are stagnant while the White House sent two advisors on television to wonder aloud why stocks are taking all this negatively.

It was incredible to watch. But not unexpected given all the times during this bull market that policymakers have rescued the bulls from the abyss. That and the hope the tariffs actually won’t be implemented but instead kick off negotiations between Washington and Beijing.

In the end, the Dow Jones gained 1%, the S&P 500 gained 1.2%, the Nasdaq Composite gained 1.5% and the Russell 2000 added 1.3%. Yields climbed, the dollar gained, gold fell and crude oil inched higher. Meanwhile, other global markets like the Nikkei and DAX jumped 1.53% and 1.79%, respectively.

AMZN stock

10 of 11 sector groups finished higher, with seven climbing more than 1%. Amazon.com, Inc. (NASDAQ:AMZN) gained 1.3% as President Trump resisted the urge to unleash another Twitter tirade against the company and its use of the U.S. Postal Service.

BA stock

Boeing Co (NYSE:BA) fell 1.0% after being down much more at the open on worries a trade war would impact its sales to China. The company is one of America’s single most important source of exports to the Middle Kingdom.

LEN stock

And Lennar Corporation (NYSE:LEN) gained 10.0% after reporting better-than-expected earnings for the first quarter. Orders climbed 30% and management remains bullish, reaffirming its 2018 outlook.

Check out Serge Berger’s Trade of the Day for April 5.

Today’s Trading Landscape

To see a list of the companies reporting earnings today, click here.

For a list of this week’s economic reports due out, click here.

Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2018/04/market-rebound-trade-war-stocks/.

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