Friday, August 30, 2019

Good News Lifts Stocks; No Pain Equals Gain

A tweet here, a headline there, and everything's all right in bizarro finance world.

News that China would not retaliate against President Trump's latest round of tariffs sent stocks soaring on Thursday, dismissing the belief that the tariffs on Chinese imports would cost consumers more.

Apparently, Wall Street doesn't really care about household budgets, so long as their favored companies make profits, and the tariffs, some of which take effect on September 1, aren't going to hurt bottom lines in the near future. Tariffs on many touchy consumer items were delayed until late December, a strategy composed by the White House to minimize pain during the holidays.

The avoidance of pain is what markets are all about these days. Stocks are not allowed to go down, to correct, even though their fundamentals may scream overpriced. Nobody is supposed to feel any pain.

The problem with such a nomenclature is that, like never telling a child not to touch a hot stove, investors are going to get burned badly when the pain is unavoidable.

So far, everybody's fingers are cool.

At the Close, Thursday, August 29, 2019:
Dow Jones Industrial Average: 26,362.25, +326.15 (+1.25%)
NASDAQ: 7,973.39, +116.51 (+1.48%)
S&P 500: 2,924.58, +36.64 (+1.27%)
NYSE Composite: 12,704.03, +144.80 (+1.15%)

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