Two little words was all it took to ramp stocks back into the green after they bounced off the 200DMA shortly after Europe closed.
First thing this morning we said that “traders are on edge ahead of the US-China trade talks taking place today and tomorrow.” And moments ago, we finally got some tentative indication of how the first day of negotiations concluded:
White House Economist Mark Calabria commented after the first day of trade discussions in China that he was “optimistic” and that US has “discreetly” given China a list of asks and that the day ended “pretty positive.”
However, wjat algos clearly ignored is that Calabria concluded on a slightly more somber tone, saying that “the tough part in the talks is ensuring China keeps its promises.”
And that was enough to ignite the momentum into the green for the day.
Others, such as Miller Value Partners PM John Spallanzani, also pinned the bullish turn back above the 200-DMA on the US-China talks, and specifically the lack of “tape bombs” following today’s U.S., China trade talks.
As Bloomberg notes the lack of a statement spurred a bid and perhaps some short covering, although a simple reason for that may be that both sides agreed not to speak, so the bad news will have to wait until tomorrow.
Meanwhile, Spallanzani said he is watching Boeing as a key indicator of Sino-U.S. tensions: the rebound in the plane-maker’s stock was the all-clear signal to wade into the equity decline.