The indexes started Tuesday in a very energetic fashion as market players anticipated that President Donald Trump might provide some fuel when he spoke at the New York Economic Club at mid-day.
The speech was upbeat, but had few details about China trade talks, which is the primary market obsession right now. There were complaints about the Fed not being more aggressive at cutting rates, talk about the benefits of cutting regulation and comparisons of the current economic strength to prior periods as well as to the rest of the world.
The rhetoric about a China trade deal did not change, but after the speech was over, the de facto Chinese spokesman tweeted about the endless number of lies from the Trump administration. This was nothing new, but did help to trigger some pent up selling. There was nothing in the Trump speech that was market negative, but the Chinese tweets finally gave the sell algorithms some ammunition.
Once again it was primarily index-driven action. Breadth was slightly negative with around 3,600 gainers to 3,800 decliners and the ratio of new highs and new lows continue to be quite low.
What has been most notable about the market for a while now is that the action in individual stocks has been quite lackluster while the indexes continue to hover around highs primarily due to a few big caps.
Intraday reversals of the sort we saw Tuesday are often a sign of toppy action, but it was not a sharp or energetic reversal and didn't seem to stir up too much fear. The prospects that a "Phase One" China deal will be done "fairly soon" helped to prevent the bears from gaining any traction.
My biggest complaint about this market continues to be the very tough stock picking. A pullback in the indexes may help in that regard, but that has been the case for a while now. I'm certain that conditions will change and a little patience will be rewarded.
Have a good evening. I'll see you Wednesday.