Everyone is already stopped out and it's not even 8am.
Barely 90 minutes after markets tanked after China vowed it retaliate imminently to Trump's imposition of new tariffs, futures exploded higher on what was interpreted as a conciliatory headline from China that apparently reversed all the negative sentiment.
- CHINA HOPES U.S. CAN MEET HALF WAY WITH IT ON TRADE ISSUE: HUA
How this was indicative of anything more than what it meant, namely tacit hope that the US would concede further without making any concessions of its own, is unclear but to algos the headline was all they needed to activate the afterburners on the BTFD program and the result was the following:
European stocks similarly pared their drop on the headline, after benchmarks had dropped as much as 1.4% earlier.
That said, suggesting that the bounce will fizzle was the response in the yuan which was barely noticeable:
Perhaps to offset the sour taste the earlier news of its imminent retaliation created, the Chinese ministry of Foreign Affairs also added this:
- XI, TRUMP IN TOUCH VIA MEETINGS, PHONES, LETTERS: CHINA MOFA
As Bloomberg's Andrew Cinko notes, "the good vibes are nice, and the letters are a nice touch after the Chinese earlier said they're hopeful the U.S. can meet them halfway. But the iron fist of tariffs and the demand for an enforceable deal (Commerce Sec. Wilbur Ross reiterated that yesterday on CNBC yesterday) hasn't gone away and there's no indication it is going to go away. Call me a sour puss, but we're just one headline away from cold, hard reality making a dramatic re-appearance."
Whether optimism persists is unclear, but what is clear is that for now, the pattern of futures surging after a CNBC "Markets in Turmoil" episode remains unbroken.
Only a CNBC "Markets in Turmoil" can save us now— zerohedge (@zerohedge) August 14, 2019