The financial press reported that stocks remained "volatile" on Thursday. But since the Dow ended the day with a loss of "only" 79 points and the S&P 500 fell just 4, the attitude appeared to be, all's well that ends well.
However, at 11:28 am EST, all was definitely NOT well as the Dow Jones Industrial Average was down 784 points. And based on the fact that the market had plunged 800 the day prior, this meant that the index had shed 1583 points in less than a day and a half. So, I will say it again, all was not well at that point in time.
Yes, the algos were clearly at work again yesterday morning. But at the same time, the narrative surrounding the China-US trade deal had gotten worse after the arrest of Huawei Technologies CFO, Meng Wanzhou.
If you are like me, the headline of Wanzhou probably wasn't "wow" moment. But to put things in perspective, this was akin to the Chinese arresting Apple's (AAPL) CFO for national security purposes.
It's that last part that causes people to scratch their heads. The charges against Wanzhou are that she violated the sanctions put on Iran. Sure, this is probably an issue that needs to be dealt with. But given that Ms. Wanzhou is the daughter of Huawei's founder, the arrest did indeed appear to be a "wow" moment.
The move came after Trump had appointed Lighthizer as the chief negotiator for the trade "deal" and the now famous "Tariff Man" tweets. When combined, some argue that Trump appeared to be thumbing his nose at the Chinese. As such, concerns about the potential for a trade deal to get done within the already skinny 90-day window, continued to grow.
By mid-morning, the flush lower in the indices began ...