UPDATE ON THE BROAD STOCK MARKET (4:15 pm EST)
We have three news events influencing the broad stock market this week. First and foremost are the U.S./China trade deal negotiations. New tariffs are set to be placed on Chinese goods Dec. 15 (this Sunday) unless a better trade deal can be worked out, but the Trump White House is also considering the possibility of delaying those tariffs. This uncertainty is keeping equity markets in limbo as investors and traders oscillate between trade deal optimism and pessimism.
The second news event possibly influencing markets is, of course, the ongoing impeachment trial being pushed forward by mostly Democrats in the U.S. Congress. So far, Wall Street seems to be shrugging off the impeachment, but that may change as it comes to a head over the next several weeks.
Finally, we have December's two day FOMC meeting this week that starts today and ends Wednesday afternoon. The Fed is expected to hold benchmark interest rates steady (especially considering the stellar November jobs report), but analysts will be scouring the Fed's rhetoric for a "dovish" or "hawkish" tone concerning future interest rate policy. Dovish "coos" could keep equity markets bullish, but hawkish language would likely push the market down.
Today the broad stock market continues to be indecisive. It dropped in the morning, rallied in the afternoon, and is now dropping again as the trading day closes. The S&P 500 did drop into our target range, but the DOW was a little short. Regardless, I don't feel comfortable trading before we get the Fed's interest rate announcement tomorrow afternoon. That, perhaps with more news on the China trade deal negotiations will determine the direction of this market. If the Fed talks "dovish" and there is positive news on the trade deal, it may be enough to kick-start a "Santa Claus" rally which is often seen on Wall Street at this time of year.
We have three news events influencing the broad stock market this week. First and foremost are the U.S./China trade deal negotiations. New tariffs are set to be placed on Chinese goods Dec. 15 (this Sunday) unless a better trade deal can be worked out, but the Trump White House is also considering the possibility of delaying those tariffs. This uncertainty is keeping equity markets in limbo as investors and traders oscillate between trade deal optimism and pessimism.
The second news event possibly influencing markets is, of course, the ongoing impeachment trial being pushed forward by mostly Democrats in the U.S. Congress. So far, Wall Street seems to be shrugging off the impeachment, but that may change as it comes to a head over the next several weeks.
Finally, we have December's two day FOMC meeting this week that starts today and ends Wednesday afternoon. The Fed is expected to hold benchmark interest rates steady (especially considering the stellar November jobs report), but analysts will be scouring the Fed's rhetoric for a "dovish" or "hawkish" tone concerning future interest rate policy. Dovish "coos" could keep equity markets bullish, but hawkish language would likely push the market down.
Today the broad stock market continues to be indecisive. It dropped in the morning, rallied in the afternoon, and is now dropping again as the trading day closes. The S&P 500 did drop into our target range, but the DOW was a little short. Regardless, I don't feel comfortable trading before we get the Fed's interest rate announcement tomorrow afternoon. That, perhaps with more news on the China trade deal negotiations will determine the direction of this market. If the Fed talks "dovish" and there is positive news on the trade deal, it may be enough to kick-start a "Santa Claus" rally which is often seen on Wall Street at this time of year.
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