Market Report

» Posted by on Jan 25, 2019 in Shop Talk, Uncategorized | 0 comments

Stocks are slightly higher this morning on better than expected data out of Europe and some fairly strong earnings being reported here in the U.S.

Many traders continue to take a “wait-and-see” approach, as next week looks poised to offer up some major headlines.

President Trump was scheduled to make his “State of the Union” address, but that has been canceled and won’t happen until after the government shutdown ends, which some argue might not happen for a few more weeks.

The stock market will also be eager to see headlines from another round of trade talks with the Chinese. If plans remain in tact, Chinese Vice Premier Liu will visit the U.S. January 30-31st. Reports circulating earlier this week, which talked about U.S. leaders canceling meetings with Chinese counterparts is still being dismissed as false or fake news.

As we sit here today, the Chinese are still coming in town next week. Perhaps we will learn more about specific details once the two sides conclude their meeting. Interestingly, with U.S.-China trade talks set to start next Wednesday, U.S. Commerce Secretary Wilbur Ross made a statement yesterday that a trade deal is still “miles and miles” off.

Also next week, the Fed will be holding their first meeting of 2019. Most everyone suspect the Feds will leave rates “unchanged” at this meeting.

The debate seems to be if the Fed will hike rates again during a summer or fall meeting. Most sources I speak with are debating between the July and October meeting as perhaps the next rate hike.

Also next week, traders will be digesting a fresh U.S. GDP estimate, and an even greater number of corporate earnings which will include big names like…Amazon, AT&T, Boeing, Caterpillar, Chevron, Exxon, Facebook, General Electric, Harley-Davidson, MasterCard, McDonald’s, PayPal, Pfizer, UPS, Verizon, Visa, and the highly anticipated Apple earnings.

The trade will also be digesting the latest U.S. monthly employment numbers. I should note, yesterday’s weekly U.S. unemployment claims came in at a 49-year low. U.S. employment continues to look very strong.

The trade is also going to be paying close attention to crude oil prices. There seems to be a bit more brewing in regard to sanctions impacting Iran and those who do business with them.

There’s also more uncertainty and moving parts involving Venezuela.

To summarize, I suspect if crude oil can gain a bit of nearby momentum, the Fed delivers less hawkish commentary, and a few positive headlines circulate involving Chinese trade, the stock market could find enough tailwind to push itself higher.

The question is can it hold and continue to gain on that momentum.

There’s still a ton of technical hurdles to overcome on the charts and more political hurdles in the path ahead.

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