This article was originally published on ETFTrends.com.
U.S. markets and stock exchange traded funds were stuck in sideways action, following three consecutive days of back-to-back gains, as a lackluster tentative U.S.-China trade deal kept markets in a holding pattern ahead of the third-quarter earnings season.
The negotiations that ended last week revealed the U.S. and China took a major step to ease the protracted trade war that has weighed on global economy, but the dearth of details left investors wanting, Reuters reports.
“At the end of the day, all that happened on Friday was the tariffs were postponed,” Michael Hewson, chief market analyst at CMC Markets, told the Wall Street Journal.
“Investors are trying to wrap their head around this ‘non deal’,” Robert Pavlik, chief investment strategist at SlateStone Wealth LLC, told Reuters. “If (the market) was really skeptical, it would be selling off a lot harder. But it’s not because there are some good points to it: that they are still talking and potentially reaching a deal.”
Further adding to market skepticism, state-run publications in China provided a more measured tone in response to the two countries’ preliminary agreement.
Investors are now waiting on the third quarter earnings season to gain a better look on how the trade barriers have affected the domestic economy and corporate growth. The reporting season will go into full swing on Tuesday where the big U.S. banks are expected to report a 1.2% drop in earnings on interest rate cuts and weakening economic growth.
According to Refinitiv data, analysts are projecting a 3.2% decline S&P 500 company profits for the quarter year-over-year.
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