$DIA, $SPY, $QQQ, $RUTX, $VXX
FLASH: March is shaping up as pivotal for the world economy.
The coming weeks are set to offer clarity on a US-China trade deal, Britain’s fate within the EU and any signs that China’s economy is turning around.
Also, President Trump is mulling a report that may lead him to place tariffs on European and Japanese cars, while the Fed, European Central Bank and Bank of Japan will decide policy on stimulation.
The US ready to set a Summit as soon as mid-March between Presidents Trump and Xi, with White House economic adviser Larry Kudlow hailing a potentially ‘historic deal.’
If an agreement is reached, the relief may be short-lived if Britain crashes out of the EU on 29 March without a divorce deal, compounding a broader slowdown across the region. What investors are not being told by the media is that the US-UK pending trade deal is huge.
March is also the month for China’s annual National People’s Congress, when Parliament will sign off on the government’s economic plan for the year. The centerpiece announcement will be the annual growth target.
Some economists expect China to set a lower growth target from 6 to 6.5% down from 6.5% for the past 2 years.
Key Chinese data will also be released over weeks ahead indicating whether or not the world’s 2nd-largest economy is responding to policy easing after months of stimulus.
How events play out will dictate investor sentiment after a rocky start to the year. The IMF in January cut its forecast for the world economy, predicting it will grow at the weakest pace in 3 years in Y 2019.
Risks were evident Q-4 Y 2018 data showing the US economy was steadier than thought, growing by 2.9% annualized, though a buildup of inventories means the outlook is far from certain.
While Goldman Sachs’ Chief Economist believes the global economy may have already bottomed out, the risk to Goldman’s global GDP forecast of 3.5% for Y 2019 remains to the Southside.
‘The coming weeks should more clarity on BREXIT, US tariff threats to EU auto producers and whether Beijing is succeeding in re-stimulating China’s growth. A benign outcome in each case could improve the outlook for exporters and broader business sentiment.
Friday, the major US stock market indexes finished at: DJIA +110.32 at 26026.32, NAS Comp +62.82 at 7595.38, S&P 500 +19.20 at 2803.65
Volume: Trade on the NYSE came in at 954-M/shares exchanged
- Russell 2000 +17.9% YTD
- NAS Comp +14.5% YTD
- S&P 500 +11.8% YTD
- DJIA +11.6% YTD
Note: The S&P 500 finished the week higher once again.
HeffX-LTN’s overall technical outlook for the US stock markets major indexes is Bullish for the week ending 1 March 2019.
Have a terrific weekend.
DIA, SPY, QQQ, RUTX, VXX, DIA, risk, GDP, emerging, markets, Chinese, GS, BREXIT, investor, sentiment, agreement, President, Trump,
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