$DIA, $SPY, $QQQ, $RUTX, $VXX
The world enters Y 2019 with some uncertainty about the prospects for global growth.
The US is the bright spot and 1 of the most powerful job creators and drivers of international trade.
If The Trump Administration and the new Congress are able to work together, there are areas where the US can lead for the benefit of the domestic economy, and the world.
The December PMI reading for China saw a contraction in the manufacturing sector confirmed that the country has also been slowing, which reflects a combination of internal and external factors, including unusual trade uncertainties.
Attempts by Beijing to stimulate growth through its traditional policy tools, including directed lending, have not worked as before.
The US stands out, driven by pro-growth policies that included deregulation and fiscal stimulus. The economy maintained a solid growth performance despite four interest rate hikes by the Fed and additional monetary policy contraction in the form of a gradually shrinking balance sheet.
America is the only example in the advanced world of cyclical growth successfully handing off to a secular dynamic while also normalizing monetary policy.
But the market instability of the last few months, together with some self-inflicted economic and financial wounds cast some doubt on the sustainability of the US growth curve. And made the world’s biggest economy more vulnerable to the slowdown elsewhere.
There look to be 3 Key steps that the US can take to invigorate its growth dynamic at home and abroad, they are as follows:
1st, working with the new Congress, The Trump Administration can pursue an infrastructure initiative with both public-private partnership and innovative financing tools that involve wider risk sharing.
2nd includes resolving the partial government shutdown, avoiding unnecessary market concerns about liquidity, and an approach by the Fed that is seen as more sensitive to concerns about 2 factors: spillbacks from adverse external and technical market developments, and a balance-sheet reduction program that is dogmatic in its auto-pilot mode.
3rd, a more activist US pro-growth leadership role in global policy forums such as the G-20, the G-7 and the IMF. Without US leadership it will not happen
A US led growth agenda, will allow the domestic and global economies the ability to avoid a slowing in Y 2019 with significant risk to financial stability.
Without US leadership, it will just be a matter of time before weaker economic and financial conditions undermine institutional strength and add to the political and social pressures around the world.
Wednesday, the major US stock market indexes finished at: DJIA +18.78 at 23346.24, NAS Comp +30.66 at 6665.95, S&P 500 +3.18 at 2509.99
Volume: Trade on the NYSE came in at 962-M/shares exchanged
- NAS Comp +0.5% YTD
- Russell 2000 +0.5% YTD
- DJIA +0.1% YTD
- S&P 500 +0.1% YTD
HeffX-LTN’s Technical Outlook for the US Major Stock Market Indexes is Bearish to Neutral.