Back To Normal Today? And A Reminder Of What Normal Is

With all available officials on deck today in Beijing and Washington to talk down fears of a trade war and to talk up prospects for trade talks, the U.S. financial markets have returned to “normal.” And what is “normal” right now? A 0.47% gain in the Standard & Poor’s 500 stock index as of 1:25 p.m. New York time as tech shares recover with Facebook (FB) up 1.81% and Amazon (AMZN) up 2.62%.

Normal is also a down day for Treasuries with the yield on the 10-year note climbing two basis points to 2.81% as the fears that drove investors to this “safe haven” abate and Federal Reserve members again begin to talk about inflation hitting the Fed’s 2% inflation target in the next quarter or two (as Atlanta Federal Reserve Bank head Raphael Bostic said in an interview this morning.) With fears of a trade war diminishing, traders and investors sold some of their positions in gold and the metal fell 0.87% this morning. Oil is up again today on the same dynamic with West Texas Intermediate ahead 0.49% to $63.68 a barrel and international benchmark Brent up 0.66% to $68.47 a barrel.

I’d note the moderate nature of this recovery. While big names such as Facebook and Amazon are up healthy percentages today, the NASDAQ Composite Index as a whole is ahead just 0.33%. And while the S&P 500 kissed off the 200-day moving average before moving upward at 2658.69 it remains substantially below the 50-day moving average at 2714.11. The S&P 500 touched its February 8 low at 2581 on April 2 before beginning the current move higher.