It’s too early to take stock of the damage caused by Florence (though some of the smaller towns in the Carolina’s are likely to have extreme flood damage). So far the markets, as dispassionate as they are, are taking the whole thing in stride.
Consumer confidence remains high, and the economy seems to continue chugging. The question on most minds is whether or not trade deals are going to go sour. Thus far we’ve gone past simple rhetoric, with the Trump looking to place additional tariffs on $200 billion of Chinese goods. The question is whether or not China will come to the table or take their ball and go home. (Judging from their stock market performance, they’ll probably come to the table).
So far, from a technical behavior perspective, markets have taken this news in stride. In fact, the S&P500 appears to be consolidating around the 2900 level.
The basic setup for the week is a fairly narrow range, with the SPX likely hovering around the 2890 mark for the low, with a high of 2925 or so. This appears to be a sideways pattern, with a slight bias to the up-side. If the market holds consistent with recent behavior, a little bad news is going to be taken in stride. Good news will push things higher. And only if it’s really really bad stuff would the SPX move below the 2870 level.
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