Author: Innovative Income Investor

As I suspected might happen tariffs on Mexico have been ‘paused’ for at least a month. When the word got out at about 9:30 a.m. central the S&P500 went straight up 1.50% in about 20-30 minutes. Nothing has changed for Canada and China–although I highly suspect Canada may fall into line with Trumps wishes and have the tariffs also paused–we’ll see.

The uncertainty of what comes next is going to live with the markets pretty much all week long. One just can’t predict what this administration will do next–and markets hate uncertainty. We are going to be doing a lot of guessing for months to come.

I was rather shocked to see all of our accounts up–even in the depths of the equity sell-off. Fortunately markets didn’t drive interest rates higher on inflation possibilities—I thought they might and that could have been painful.

While it is a dangerous time to be investing in anything–one has to keep hunting for things to buy–or do you want to settle on a 4.2% return from CDs and money markets? 4.2% isn’t terrible for sure–but one can do a bit better without going crazy–of course that is assuming that we have seen the peak in interest rates (the 10 year high was around 4.8%) and this is impossible to predict.

The overnight equity sell off isn’t as bad as I imagined it might get—and interest rates are falling by 3-4 basis points.

I suspect over the course of the day we will see a lot of up moves and then down moves in stocks, while it would appear that maybe bonds will kind of tread water.

I would expect that in spite of interest rates moving a bit lower we will see some red in income issues as the baby gets tossed out with the bath water–I know for sure I won’t be tossing any bath water out. Sometimes one thinks they can either buy or sell during the course of one of these days and gain some type of advantage–seldom, if ever, is that the case–you sell at the wrong time and also try to time a buy only to see the issue move sharply lower. On the other hand if solid quality issues get slammed hard and you simply are focused on locking in a great yield that is safe maybe legging in to some shares is in order.

One needs to watch for quick reversals in markets–remember that we could get an announcement at any minute that tariffs are now off–or more tariffs are on the way–one never knows.

I will now just watch.

I’ve been pondering the effect that the announced tariffs will have on markets on Monday. I can’t think of of reason that this will be well received by markets–stocks or bonds. It could be pretty ugly.

Friday afternoon markets were doing just fine but by early afternoon stocks began to fall and interest rates shot higher–I know my accounts which had been mildly green through the morning ended up red for the day. Overall while it was a reversal it was a reversal off of all time highs–so you know there remain plenty of nervous folks out there looking to take a profit–or looking for a reason to take profits.

I would expect the futures markets to open plenty red tonight–we always get a severe reaction in those markets to weekend news. The question is whether they remain negative all night and then tumble hard tomorrow to start trading? Will markets tumble hard and then bounce back up? Will the tariffs remain in place or do we have a quick reversal like we saw with Columbia last week?

I know one thing for certain–I will not be selling regardless of what happens tomorrow. 1st off there is no advantage to selling–markets will trade immediately to a level which would guarantee one locking in a loss. I think one should take a deep breath and then determine whether to simply stand pat and/or look for something to buy–although buying too soon can cause a lot of pain.

Well it is 3 pm (central) so it will be some hours because we see various markets open–and there is not one darned thing I can do before tomorrow so no use worrying about it.