"Sharp rally after Powell speaks"

TUE, JUN 04, 2019

YOUR AFTERNOON NEWS UPDATE AND MARKET ACTION FROM CNBC

AS OF TUE, JUN 04, 2019 • 12:05 ET

DJIA		25215.04
		+1.59%	+395.26

S&P 500		2786.43
		+1.53%	+41.98

NASDAQ		7473.52
		+1.92%	+140.50

EDITOR'S NOTE

The Dow's up more than 400 points today, and it sounds simple: "trade tensions ease" and "the Fed signals it will help the economy, if needed."

But today is not one of those simple cause-and-effect market days we've had so many of lately, where the catalysts are crystal clear.

As for the first part, on trade tensions easing, here's the Reuters headline from early this morning: "China commerce ministry says the differences and frictions between China and U.S. should be resolved through dialogue and negotiations."

Sounds...not exactly groundbreaking to me, but all right. Presumably markets are relieved he didn't say "resolved through blocking rare metal earth exports and barring Chinese travel to the U.S." Except that separately, China just did warn its citizens about visiting or studying in the U.S. (We will actually ask Mitch Daniels about this today.)

Not only that, but President Trump in his news conference with Theresa May this morning didn't back down one iota on Mexican tariffs, as some have speculated he ultimately will. That's also being overlooked on the trade front today.

Meantime, we got the much-awaited speech from Fed Chair Powell, in which he said "as always, we will act as appropriate to sustain the expansion," which is being construed as an openness to rate cuts (Bullard had signaled this yesterday, too). We'll see what Clarida says when he joins us at 1:15 p.m.

The funny thing is Powell's speech barely budged the market when it first crossed the wires just before 10 a.m. But for sure, we've been on a steady climb since. It's just one of those days where the market's deciding that everything's coming up roses--so far.

Much more to come! See you soon...

Kelly

Kelly Evans

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