ESP Tuesday - Shrug fest. Is the Market Losing Interest in the Tariff Thing?

It’s a Market of Stocks. Not a Stock Market.

The current market action suggests interest is moving away from geopolitics toward the action in individual stocks.

The market’s reaction to the latest round of tariffs out of Washington resembles a shrug, which may turn out to be a good thing over time as it signifies that the algos are starting to factor in this new normal. It also suggests that the focus to inflation and interest rates is returning to the forefront. Of course that puts the inflation numbers, especially CPI, at the top of the worry list for the bond market, which is retreating after its recent rally. Moreover, the current action indicates that the focus is now on individual stocks.

Meanwhile, the market’s sentiment is also returning to the normal range after a slight dip into Fear last week. The CNN Greed/Fear Index at 46, this morning.

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Market Update

The New York Stock Exchange Advance Decline line (NYAD) remains range bound as the daily grind, fueled by geopolitics and Washington’s ongoing drama continues to fuel indecision amongst the trading crowd. The 50-day moving average remains the important decision point.

The U.S. Ten Year Note yield (TNX) is rebounding ahead of tomorrow’s CPI release. The current floor is 4.4%, while a move back above 4.6% would be a big negative.

Our ESP portfolio remains in good shape. This morning, I’m adding a new pick in the increasingly overlooked energy sector.

Bitcoin (BTCUSD) continues to trade in its recent range with between $90,000 and $110,000. One of these days it will break out of this trading range and things will get very interesting.

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