Cashin – “The Shorts Began To Panic”
Cashin – “The Shorts Began To Panic” from King World News
With stocks surging and the US dollar rebounding, one of the legends in the business said, “The shorts began to panic.”
A Short Panic
July 26 (King World News) – Here is a portion of today’s note from legend Art Cashin: The stock market painted a beautiful picture yesterday but that wasn’t truly evident until the final thirty minutes in trading.
Apparent Tariff Truce Spooks The Shorts – Stocks began the Wednesday session in a rather shaky fashion.
The Dow weighed heaviest in the early trading and that was due to two specific components.
General Motors announced results that were in line with expectations; however it said costs were rising and looked to continue to do so. The implications were that the newly added tariffs on steel and aluminum were beginning to pinch and would likely continue to do so.
Boeing also undercut the Dow; at one point taking over 70 points from the index. Boeing’s earnings were okay but it lowered its outlook somewhat.
Stock indices continued to struggle throughout the morning, ultimately bottoming out around the time that European markets were closing.
The mood then shifted slightly as the Trump/Juncker meeting approached. Some very mild short covering seemed to begin as the bears reduced their risk exposure on the chance that the talks might bring some mild progress.
That process continued through much of the afternoon’s trading.
Messrs. Trump and Juncker made a pre-opening statement. It helped the market very slightly.
Then around 3:30, the Dow headlined that the two parties had agreed to put the tariff talk on hold.
The shorts began to panic. A stampede to cover burst out, shooting the Dow smartly higher.
Net/net the rally was brief but relatively broad. Ten of the 11 S&P sectors moved smartly higher led by a sharp upward reversal in the chip stocks.