It's Not Too Late for Mary Trump to Delete This Atrocious Post About...
Abilio Acosta Focuses on the Small Issues, and Eddie Glaude Has a Glorious...
The Double Standard of ID Requirements
Israeli Terrorist Attack Highlights Stupidity of Gun Control
Zuckerberg Says He Regrets Censorship, So Why Is Meta Still Trying to Interfere...
Kamala Caught in Major Lie About Joe Biden
Vulnerable Democrat Congressman Has Ties to Radical Islam
Walz 'Misspeaks': How the Media Are Framing the Governor's Lies
You Won’t Believe How Many Illegals Crossed This Northern Border Sector
Illegal Alien Fugitives Who Fled Florida Were Located in NYC
Kamala Harris Sides With Striking Workers As Union Boss Brags About 'Crippling' Effects
Hmm: Trump's Margins Expanded Significantly When a Pollster Asked Voters This Question
Mayorkas Said There’s Not Enough Funds for Hurricane Season. Here’s Where the Money...
Colin Allred Prioritizes Protecting Radical LGBTQ+ Policies While Alienating Texas Values
Iran's Puny President
OPINION

There Might Be More To This Market Than The China Trade Deal...

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
Advertisement
Advertisement
Advertisement

It’s been a remarkable start to the year, buoyed in part to the optimism about a potential trade deal or framework outline between the United States and China. It will be interesting to see what other developments will take place between now and the highly anticipated meeting next week that could catapult trade relations forward as the March deadline looms. However, there might be more to this market than the China trade deal and an accommodative Federal Reserve. The Russell 2000 is by far the biggest winner, which generally bodes well for the domestic economy. And yet, there have been sharp adjustments in corporate earnings estimates for the first half of the year, which would belie the notion of a strong economy.

Advertisement

Be that as it may, the U.S. economy continues to look firm compared with the rest of the world, especially the Eurozone. Yesterday, The International Monetary Fund (IMF) updated its global growth estimates with a big decline to 3.5% from 3.7%, as the euro area growth was lowered to 1.6% from October’s estimate of 1.9%. Germany is really taking a significant haircut to an 1.3% growth rate in 2019 from the 1.9% estimate just three months ago.

The United States and China’s growth estimates were unchanged by the Gross Domestic Product (GDP) numbers out yesterday, which point to the slowest annual growth since 2000. Beyond implications for trade talks, emerging markets need a stable Chinese economy.

Market Equities Indices

Friday

Week

2019

Dow Jones Industrial Average

+1.38%

+2.96%

+5.91%

S&P 500

+1.32%

+2.87%

+6.54%

NASDAQ Composite

+1.03%

+2.66%

+7.87%

Russell 2000

+1.04%

+2.43%

+9.93%

 

Technical View

Major Indices Breaking Out

Big stock indexes are in the midst of breaking out through walls of resistance. They have already hurdled their 50-day moving averages and have the 200-day moving averages within sight. So, all the major indices are in the thick of it, ready to surge if they can clear these final hurdles.

Advertisement

Portfolio Approach

We are down to our last bucket of cash, just as the market is at a moment of truth where it has to break through a few additional upside tests or potentially pull back, although I don’t think the market must retest recent lows. For more information about our Hotline service, call your rep, or email us at info@wstreet.com. 

Communication Services

Consumer Discretionary

Consumer Staples

2

4

1

Energy

Financials

Healthcare

1

1

1

Industrial

Materials

Real Estate

3

4

0

Technology

Utilities

Cash

1

0

2

 

Today’s Session

After a three-day weekend, the market momentum has stalled this morning. The focus remains on what the worst-case scenario possibility could be from an array of issues. 

I think some of the actual and potential headwinds will be resolved in short order, including solid movement on China trade negotiations, but the slowdown in China might be more problematic.  China implemented dozens of schemes in 2018 to move the economic needle- none worked.  They haven’t worked collectively.

The biggest earnings report this morning comes from Johnson and Johnson (JNJ), which beat on revenue and earnings, but management’s range on guidance was lowered.

Advertisement

Traveler’s (TRV) also beat on the top and bottom lines.

EBay (EBAY) is spiking on reports Elliott Management has taken a stake.

Join the conversation as a VIP Member

Recommended

Trending on Townhall Videos