Nikkei 225 closes lower by 0.18% at 21,877.89

Japanese stocks recover to end the day closer to flat levels

Nikkei 29-05

The market is keeping more cautious but any hints of a major risk-off play remains at bay for now, with investors all still waiting on US president Trump’s announcement on China that is to come later in the trading day.

Despite the slightly lower finish, it was still a solid week for the Nikkei as it gained by a little over 7% in trading this week.

Elsewhere in the region, the Hang Seng is currently down by 0.6% while the Shanghai Composite is up by 0.1%; both also off the lows posted earlier in the session.
Looking to the currencies space, the dollar continues to trade lower as the euro breaks higher above 1.1100. USD/JPY is also being pressured closer towards 107.00 currently.

UK seeks to create a 10 country alliance for alternative 5G supply instead of China

The UK Times has the report

  • UK seeking an alliance of ten democracies
  • to provide alternative suppliers of 5G equipment and other technologies
  • To lessen reliance on China
Countries UK is approaching include the other G7 constituents plus Australia, South Korea and India.
Link (Times may be gated)
The UK Times has the report 

G20 says 36 of 77 eligible countries have applied for debt relief

Group of 20 major economies offered a suspension of official bilateral debt payments to77 eligible countries

  • 36 of the 77 have applied
The offer is to help countries combat the coronavirus pandemic and its economic impact.Saudi G20 secretariat said the debt relief initiative approved in April could provide immediate liquidity of $14 billion as more countries participated and that amount could increase significantly if additional creditors, including multilateral development banks and private-sector creditors, joined the initiative.
(info via Reuters )
Group of 20 major economies offered a suspension of official bilateral debt payments to77 eligible countries

US stock markets reverse course late to close lower

Disappointing close

Disappointing close
It had been a one-way trade in US stocks from yesterday’s low but equities quickly changed course after President Trump said he will make an announcement about China in a press conference tomorrow.
Clearly the market is concerned that it’s some kind of escalation beyond some minor sanctions around Hong Kong. I’m not so sure that’s realistic but you always have to expect the unexpected with Trump. Watch out for leaks ahead of his announcement.
Closing changes:
  • S&P 500 -6 points to 3029 or -0.2%
  • DJIA -0.6%
  • Nasdaq -0.5%

7 dusty words of trading.

Be careful how you use the following words and phrases as they become road blocks or worse take you down the wrong path.

Should– Phrases include: “The market should have” and “I should have”. Those phrases are often used to socialize losses. They are a strong signal something is off. They should be used to aid you in correcting your vision not make you feel better.

Must– Phrases include: “The market must…”, “I must make money”, or “I must trade”. The market does not have to do anything and either do you. When you use the word “must” it is hardly ever from a position of strength. The market knows when you are desperate and will take full advantage of you. Keeping your expenses as low as possible will make it easier to not make those statements.

Will– Phrases include: “The market will..” and “I will make money”. Once again the market does not like to be told what to do. It is the bratty kid screaming at the tops of his lungs. The word “will” relaxes your mind, similar to “should”, people use it to be lazy instead of a black background in an otherwise light picture. You can do everything right and still lose money. That is why trading is so effective at diminishing confidence. In most every activity, if you do everything right you are going to get the desired result. Doing the “right” things is bare minimum. Of course, over time you will get paid for doing the right things but it is never when you think it should be and hardly how much you anticipated.

Won’t– Phrases include: “The market won’t…” or “I won’t make money”. Notice a theme here? You are part of the market, you are not the market. Not getting what you expect, even if it is positive, confuses the brain. If you expect to lose and don’t it is still a bad outcome. The market is a one way walkie talkie, you listen, it talks.

Can’t– Phrases include: “The market can’t..” or “I can’t…” or “I can’t lose anymore”. Yes the market can, go look at a chart. Go look at a Fed day or about any chart from 2008. Not only can it happen, it does happen. There are no more once in a lifetime moves in the market. There are and always have been life changing moves. No one ever said trading was easy but at least in the case of futures someone is taking your money. If you think you can’t, you probably wont. The market will take every penny you have. If can take every penny you put at risk. Fix the problem, when you run out of money it is too late.

Impossible– Phrase includes: “It is impossible to make money”. Once again someone, somewhere is making money. It may not end up being an efficient use of your time or capital but it is possible. You are substituting an excuse for execution.

Sense– Phrase includes: “The market does not make sense”. Many fortunes are made in an illogical market. Logic is a bigger driver than risk controls for most people. It is easier to ignore your P/L when you can see or touch the catalysis. For example, it is cold buy natural gas. By the time you change your view or are forced to change, the market flips. Logic will eventually prevail, with or without you.

EIA weekly US oil inventories +7928K vs -1911K expected

Weekly petroleum inventories:

  • Prior was -4982K
  • Gasoline -724K vs +150K expected
  • Distillates +5495K vs +2500K expected
  • Cushing -3395K vs -5587K prior
That’s a big build but it was largely foreshadowed by the API report late yesterday. Oil is under some modest pressure and down 37-cents on the day to $32.44.
API numbers from late yesterday:
  • Crude +8731K
  • Cushing -3370K
  • Gasoline +1120K
  • Distillates +6907K