Equities fell today with the DOW closing down -274 points. Technology was hit hard with the NASDAQ losing 1.9%. There’s a number of factors that contributed to today's selloff including concerns that Trump's pro-growth agenda could be dead on arrival in Congress because many are echoing that is will be the end of their political careers to work with Trump. As an example, numerous CEO’s resigned from Trumps advisory panels and some of the panels we disbanded. These CEO's felt that they could not afford the negative impact, to include the loss of customers (i.e. sales), due to any association with Trump.
The selloff seemed to accelerate when there was news (true or fake) that Trump's chief economic advisor, Gary Cohn, was resigning from his position as the Director of the National Economic Council. The White House later declared that the rumor false. While Trumps tactics apparently worked well in real estate dealings he really needs an advisor to consult with prior to speaking or tweeting! Just because you’re a great basketball player does not mean you can play baseball!
There could also be some profit taking going on as well since the market just hit new highs. There is also an unproven hypothesis that many investors are looking for reasons to pull out of the market. Another factor in today’s selloff could be the terrorist incident in Barcelona, Spain where 13 were killed and over 50 people injured. There is late news a second attack was discovered and stopped.
We are watching this closely in hope of finding a good buying opportunity near the bottom. August is a historically unstable month and we are trying to be careful in selecting entry points. The VIX was up today and has not shown a positive indication that it is reversing direction that would signal the market is ready to move up again. The S&P did trade below last week's low, on light volume, which leaves open the possibility of a reversal and up day tomorrow.