Yields Have Much Farther to Fall

It often seem as though trade-deal news drives the markets, but how could this be so when we all know that China will never, ever change its crooked ways? Not that it matters. If Trump hadn’t started a tariff war, it would have made little difference in the way a bull market now in its eleventh year behaves; stocks would still be trading about where they are. The only difference is that the con-artists who make their living levitating stocks would have found a different story to drive the short-covering rallies that alone are capable of boosting the broad averages past old highs.

‘Phase One’ Forever!

When we read in the Wall Street Journal that shares have risen because traders supposedly were optimistic on a given day about the tariff talks, we understand that this is poppycock that is not even remotely true. Even so, the hair-trigger reflex of institutional investors is to buy stocks whenever there is the faintest bullish buzz, and to dump them the instant China responds with incredulity. Wednesday’s earth-shaking story was that a meeting to enact phase one of the deal has been pushed out to December. Stocks greeted this discouraging mid-day tidbit with spasms that lasted for all of ten minutes; then they settled back into their wonted, bullish groove. At this rate, the talks will drag on indefinitely without producing any tangible results. Although it has been clear for some time that this is what both sides want, it was not until this afternoon’s gratuitous spasms that investors revealed it is what they want as well.