|Day's Range||0.2800 - 0.2800|
China wants further talks in October to over the details of the "Phase One" trade deal set out by President Donald Trump before getting Xi Jinping to sign it, Bloomberg reports. Last Friday, Trump said the U.S. and China reached an initial but “substantial” trade agreement dealing with intellectual property, major agricultural purchases and financial services. The deal would avert a new round of tariffs on China, and includes an agreement by the Chinese to purchase up to $50 billion worth of agricultural items.
The next economic downturn is likely to be modest at most, according to the professor who established the yield curve as a recessionary indicator.
The United States bond market never officially shuts down, but it observes the holiday trading schedule recommended by the Securities Industry and Financial Markets Association (SIFMA). Bond market holidays are not enforced, but merely recommended. Columbus Day is a bank holiday.
The United States and China have reached an initial but “substantial” trade agreement dealing with intellectual property, major agricultural purchases and financial services, President Donald Trump said Friday afternoon. The partial agreement could signal a major easing, or even an imminent end, to a trade war between the two countries that has been widely blamed for hurting the global economy. Trump said the two countries are “very close to ending” the trade war, which has been one of the dominant economic events in his presidency.
U.S. markets and stock ETFs rallied Friday on growing optimism of progress between the U.S. and China trade delegation, with President Donald Trump providing an upbeat evaluation of trade talks. On Friday, the Invesco QQQ Trust (QQQ) was up 1.8%, SPDR Dow Jones Industrial Average ETF (DIA) rose 1.5%, and SPDR S&P 500 ETF (SPY) gained 1.5%. The stock markets strengthened on hopes that the two largest economies in the world can reach an accord and that Beijing is willing to compromise with Washington before the White House hikes tariffs to new levels next week, along with imposing additional levies in December, the Wall Street Journal reports.
What matters, according to the market, are the trade talks between the U.S. and China, and that any possible agreement (on pulling back higher tariffs, etc.) would be a revitalizing tonic.
There's been a lot of talk recently about how the stock market -- specifically, the S&P 500 index -- hasn't gone anywhere in a long time. Indeed, since the U.S.-China trade war started in late January 2018, the SPDR S&P 500 ETF (NYSEARCA:SPY) has gained just 4%.Source: Shutterstock A pedestrian 4% over the course of the past 20 months? That's nothing. The average annual gain for stocks since 1950 is about 7%. We are at about half of that… over nearly double the time frame.In the long run, stocks and the SPY ETF will breakout to the upside. Recession talk is overstated, economic fundamentals are solid, current headwinds will turn into tailwinds, and valuations remain normal. But, in the short run, stocks will continue to trade sideways, because there's simply too much political noise at present to warrant a big move higher in stocks from current levels, which seem appropriate given the fundamentals.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs such, the SPY ETF should be seen as a "near-term pain, long-term gain" situation. For the foreseeable future, the SPY ETF will likely continue to bounce around, without netting much of a gain. But, over the next two to three years, the ETF should charge higher as stocks move past today's noise. Plan your portfolios accordingly. Stocks Will Charge Higher Medium TermIn the medium-to-long term, stocks and the SPY ETF will charge higher.The rationale is simple. We aren't crawling into a recession. Yes, there are warning signs out there, like contracting manufacturing activity, slowing services activity, the yield curve inversion, negative corporate earnings growth, and a plethora geopolitical risks. But, this feels an awful lot like 2015/16 - not 2007/08.That is, we are slowing, not dying. * 10 Best Cloud Growth Stocks Right Now True, there is a lot of geopolitical noise and slowing growth (like we had in 2015/16). But, unlike 2007/08, we don't have a debt problem (today's elevated debt levels remain in check by low rates and strong cash balances), the labor markets remain very healthy (the unemployment rate started creeping up in 2007 prior to the crash, while the unemployment rate today continues to drop), the headwinds affecting growth (the trade war and having interest rates ahead of inflation) can be walked back, and there has been and projects to remain a ton of fiscal stimulus in the economy (whereas prior crashes/recessions were precipitated by a notable lack of fiscal stimulus).In other words, the economy is slowing, but it's still on solid footing. For stocks, that means corporate profit growth should remain fairly healthy over the next several years. Healthy profit growth coupled with today's historically normal market valuation, implies that in the medium to long term, the SPY ETF should march higher from here. Beware Near-Term Political Noise, Valuation RisksIn the near term, however, investors should heed political noise and valuation risks, as those two factors will likely keep the SPY ETF stuck in neutral for the next few months.Specifically, there's a ton of geopolitical noise out there right now. You have the trade war with China, and that tiff only seems to be getting bigger, as actors and industries like the NBA, South Park, and video games have been dragged into the mess. On top of that, there's an impeachment process taking place in Washington, for one of the most controversial U.S. presidents in history. Even further, you have Brexit, tensions in the Middle East, and tensions in Southeast Asia.Indeed, according to BlackRock's geopolitical risk indicator, geopolitical risks today are as high as they've ever been in the past decade. Stocks won't march higher against that backdrop. Just look at other periods of high geopolitical risk -- late 2011/early 2012, and late 2014/early 2015. Stocks didn't perform great during those eras. * 10 Great Biotech Stocks to Buy in Q4 This is also complicated by the fact that, according to most numbers, the S&P 500 index is exactly where it should be right now. Consensus Street estimates peg S&P 500 EPS at roughly $163 in 2019. The median trailing price-to-earnings multiple for the index over the past thirty years is 18. An 18 earnings multiple on $163 in EPS implies a 2019 price target of 2,934.Thus, political noise and valuation risks will likely keep the SPY ETF stuck in neutral for the few next months. Bottom Line on SPY ETFEconomic fundamentals are solid, and valuations are relatively normal, so stocks and the SPY ETF will march higher in the medium to long term. In the near term, however, political noise and valuation risks will keep stocks range-bound. As such, the SPY ETF is a classic situation of "near-term pain, long-term gain".As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post The S&P 500 Will Go Higher but Investor Patience is Necessary appeared first on InvestorPlace.
Large numbers of consumers are struggling to pay their bills, meaning that growth in consumer spending, 70% of U.S. GDP, may stall.
On Friday, investors will receive a snapshot on consumer sentiment in October and hear from several Federal Open Market Committee members ahead of the central bank’s next rate-setting meeting.
U.S. markets and stock ETFs maintained their momentum Thursday after President Donald Trump said he would meet with the Chinese trade delegation, adding to hopes of a trade deal. On Thursday, the Invesco QQQ Trust (QQQ) was up 0.5%, SPDR Dow Jones Industrial Average ETF (DIA) rose 0.5%, and SPDR S&P 500 ETF (SPY) gained 0.6%. Trump on Twitter said he would meet Chinese Vice Premier Liu He, the head of the Chinese negotiating team, at the White House Friday, dispelling fears earlier that Chinese leaders would be leaving a day earlier than expected, the Wall Street Journal reports.
Regular trading hours are 9:30 a.m. to 4 p.m. ET, but the major U.S. stock exchanges close early on certain days ahead of or just after market holidays.
As a slowing economy and trade wars cloud the outlook for U.S. companies, Goldman Sachs has compiled a list of stocks that are expected to post double-digit sales increases in 2020 despite strong macro headwinds. Excluding stocks in the financial, utilities, and real estate sectors, a mere 24 members of the S&P 500 Index (SPX) are projected to increase revenues by 10% or more 2020, per the new edition of Goldman's US Quarterly Chartbook. While the S&P 500 is up by 16.5% year-to-date through Oct. 9, 2019, six of these stocks have posted even more impressive gains: Global Payments Inc. (GPN), 56.2%, Danaher Corp. (DHR), 33.1%, Adobe Inc. (ADBE), 21.2%, Nvidia Corp. (NVDA), 35.4%, Mastercard Inc. (MA), 44.3%, and Microsoft Corp. (MSFT), 36.1%.
We are living in a time of profound generational change and it has never been more vital for business to bridge and bring together different generations perspectives, skill sets, and passions in order to be successful.
U.S. markets and stock ETFs strengthened Wednesday as investors tried to maintain optimism ahead of high-level trade talks between the United States and China on Thursday.