Commentary: Paul Ebeling on Wall Street


Stock Market Rally Awaits President Trump’s China Trade Dispute Decision

DJIA futures fell slightly Sunday night, along with S&P 500 futures and NAS futures.

The Big Q: Will President Trump suspend new China tariffs set for 15 December, or will he escalate the China trade dispute, imposing duties on a range of consumer goods

Meanwhile, the UK election and the final FOMC meeting of Y 2019 are on tap, creating the potential for a wild week for the stock market rally.

The stock market rally has moved North for the past 2 months on hopes for a “Phase 1” China trade deal or at least an indefinite ttruce. But talks to finalize an initial China trade deal have dragged on, while President Trump and Top officials have left open the possibility that the 15 December tariffs will go into effect.

If President Trump delays the 15 December tariffs, the stock market rally could get another boost. But if he escalates the China trade dispute, the market rally could decline.

Upbeat China trade news, along with a strong jobs report, helped erase the major indexes’ weekly losses by Friday.

President Trump’s China trade dispute decision could come at any moment, but that Key news for the stock market rally may not come during the trading week, as President Trump could wait until Saturday night to announce whether the 15 December tariffs are going to happen.

The current stock market rally had a constructive week last week, retreating early but closing flat to little changed on the week.

Wednesday, the Fed will end its final policy meeting of Y 2019. No changes are expected Wednesday. On Thursday, the European Central Bank is likely to stand pat too.

Prime Minister Boris Johnson and his Conservative Party are expected to win a parliamentary majority in Thursday’s UK election, paving the way for a BREXIT deal.

President Trump says Beijing wants a China trade deal, and that is true. Chinese exports unexpectedly fell 1.1% in November Vs a year earlier, with exports to the US down 23%. But China is pushing for a rollback of some existing tariffs as part of any “Phase 1” trade deal.

Remember, always take what the market gives.

Have a terrific week.