What’s it going to take to get a real, LASTING rally in the stock market? Cooperation!
Think back to Wednesday. After President Trump paused most of his tariffs for 90 days, the Dow Jones Industrial Average launched its biggest point rally EVER. The S&P 500 surged the most since 2008. The Nasdaq? It jumped more than 12%, its biggest single-day rise since the Dot-Com Bubble days.
But gold didn’t give back much of its earlier gains. Neither did Treasury yields. Those turned out to be “tells” – signs of stress elsewhere in the market that suggested equities could be vulnerable. And sure enough, stocks gave back a significant chunk (though not all) of their gains Thursday.
You can see the action in today’s MoneyShow Chart of the Day. It shows how E-Mini S&P 500 futures (ES) have been trading over the last few days in blue – along with gold futures (GC) in red, dollar index futures (DX) in blue-green, and long bond futures (ZB) in purple.
ES, GC, DX, ZB Futures (4-day % Change)
While other asset classes DID react to the stock market surge, those reactions weren’t very powerful. Then overnight and into Thursday, bonds resumed selling off along with the dollar, while gold jumped again.
When you have bonds selling off, the dollar selling off, and gold rising, it tells you something. It suggests “Big Money” is abandoning US assets – and repositioning some of the money into one of the longest-term stores of value.
It’s impossible to know if it’s being done as some form of retaliation (China selling US assets as part of the trade fight). It could just be global investors moving their money elsewhere because they don’t like the uncertainty caused by Trump’s erratic policymaking approach.
Whatever the reason, the outcome is the same. Stock market rallies will remain suspect and “squishy” until equities get some cooperation from other asset classes!
