The power of Friday's rally tells you two things:
- Is that housing and autos just don't seem to matter as they barely participated.
- This is a Nasdaq affair with some industrials sprinkled in.
The rally had all the trappings of the kind of move that inspires lots of buying. We did see some leadership from Johnson & Johnson (JNJ) . I saw follow up in Bristol Myers (BMY) and some of the packaged goods stocks.
But I think the lack of participation in the industrials, the indecisive nature of the group tells me that there are more tariffs coming and they are going to come on fast.
The question is will the techs be challenged, too?
I keep thinking about two things, the first is the theft of intellectual property that hasn't yet been addressed by the administration and, second, is the hold up over the NXP (NXPI) deal by the Chinese regulatory authorities.
I think that we got through the gauntlet just fine last week with the tariff signing and the employment number but that too many people at the end of the week seemed to be smug enough to believe that somehow the pressure is off and that this is all about a couple of old industries.
That's a mistake. The theft of intellectual property can be challenged by a Section 301 challenge directly from the trade representative and I think the Chinese are going to come under this section quickly.
Why is this so negative? We know that tech's been the leader by far. We know that the President probably feels emboldened to roll on this. We know that the "defense" gambit seems to have worked.
To me that means that tech could be next. Not now. Not this week. But soon.