Futures are moderately higher as traders continue to pin their hopes on tech stocks and brush off inflation fears.

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RBOB reached our 1.75 target forecast from last year. As we have discussed many times over the past year, the administration’s emphasis on drilling, OPEC’s deference to Trump, and a slowing global economy have enabled a substantial drop over the last 3 1/2 years.

As is often the case, we have to pay as much attention to Trump’s latest social media posts as to actual economic data. Yesterday’s sharp selloff continued overnight but was “corrected” by another TACO missive on China tariffs. The 50-day moving average was saved again.

Trump said on Friday his proposed 100% tariff on goods from China would not be sustainable, adding that he would meet with Chinese President Xi Jinping in two weeks and that he thought things would be fine with China.”It’s not sustainable, but that’s what the number is,” Trump said in an interview with Fox Business Network. “They forced me to do that.”

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Another overnight ramp job. Another selloff as we approach the open –  market action which begs the question: when will the bubble burst?

The chorus of naysayers continues to grow.

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Futures are up sharply on optimism surrounding AI and Fed rate cuts. That’s right. Things are going so well that the Fed needs to drastically cut rates. Or, so the logic goes.

Seemingly everyone agrees that the economy is increasingly polarized, with the “haves” doing very well and the “have nots” under a lot of stress. It seems highly likely that AI taking away entry level jobs will exacerbate this problem – with those affected facing much higher healthcare, utilities and student loan expenses. Will the market care?

The deportations taking place across the country will no doubt open up some jobs, but I don’t see new college grads with $30,000+ in student debt lining up to pick strawberries.

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It seems that China has finally realized the leverage they possess: Trump’s fear of market corrections. There is nothing that matters more to him, as his personal wealth and public perception are intrinsically tied to the DJIA.

Perhaps this realization is the rationale behind China’s recent trade counterattack. Futures are not amused, retracing much of yesterday’s kneejerk reaction to Trump’s TACO moment over the weekend.

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Here we go again. Trump’s latest threat to impose 130% tariffs on China tanked the S&P 500 by over 200 points – the biggest decline since “liberation day.” ES hit our 6545 target almost two weeks earlier than forecast.

It came as no surprise, then, that he had a change of heart over the weekend.

“Don’t worry about China, it will all be fine!” President Xi Jinping “doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”

Got that? The US wants to help China. Trump’s comments had nothing to do with the stock market’s demise.  Or TACOs. Definitely not TACOs.

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Futures are flat after another minor selloff which brought ES back to trend.

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Jamie Dimon has joined David Solomon, Ray Dalio, Jeremy Grantham, Michael Wilson, and the Bank of England in warning of a significant correction in the months ahead. Makes you wonder what we’ll hear from Jay Powell later today…

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In the absence of economic data, even as suspect as it’s been these past few months, today’s release of FOMC minutes takes on added importance.

Meanwhile, the Bank of England joined the chorus of those who have proclaimed the equity markets overpriced.

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Futures are up marginally ahead of tomorrow’s FOMC minutes.

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