The Market Brief
Hey team. U.S. stock index futures traded mixed on Tuesday as investors looked ahead to the results of a second round of trade negotiations between the US and China.
Let’s see what’s ahead for this market!
Macro Viewpoint
US stock futures remained steady as a second round of discussions between the Trump administration and China began, with investors maintaining a cautious stance amid a lack of tangible progress in resolving the trade tensions between the two countries.
Yesterday, the market rallied today in anticipation of the US-China trade meetings on Monday. Vol chopped around and skew continued to flatten out on the small rally.
We have round-tripped from the depths of negativity & oversold conditions. While the economy shows some signs of softening, its broadly doing okay.
Positioning and sentiment indicators are balanced and so there is still room to re-risk. In the near-term absent major shocks, risks are tilted to a further melt-up in stocks.
SPX has rallied alongside the soft data rebound, as has typically been the case in past catalyst-driven growth shocks.
The SPX has recently been more correlated with soft data than hard data, suggesting stocks should continue to rally even if hard data weaken as long as soft data continue to improve.
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