See a 10% Rally in Stocks On a Trade Deal with China

See a 10% Rally in Stocks On a Trade Deal with China

See a 10% Rally in Stocks On a Trade Deal with China

$DIA, $SPY, $QQQ, $RUTX, $VXX

  • A positive US-China statement or a tariff pause are rising possibilities
  • China’s Bear market is driving the settlement agreement.

Investors pained by the pullback in stocks are looking toward this month’s G-20 Summit for a breakthrough on trade.

With everything from higher rates to slower earnings growth and political turmoil dogging US  stocks, any cooling of tensions between the world’s 2 largest economies would likely boost equities.

Analysts now see the meeting in Buenos Aires as a logical place for President Trump and his Chinese President Xi to make some progress.

The stakes for equity investors are high, with stocks reacting swiftly to headlines on trade in the past week.

Friday, we saw the S&P 500 Index erased losses after President Trump signaled a deal is possible. Optimists say that even without a final pact at the Summit, there is plenty of room for smaller agreements or even just some friendly words that would dampen the tension.

If they come out of that and say the we are in basic agreement and now our team is working out the small details, this market would see the DJIA rise 2500 points or higher  Such a rally from current levels would imply a gain of about 10%.

The DJIA average traded around 25,500 Friday, heading for its 5th weekly decliner in the past 2 months. The gauge is up about 2.5% in Y 2018, which would be its 2nd-worst annual return since the Bull market started on 9 March 2009.

The consolidating US market have been volatile this year on US-China trade developments, so it stands to reason that a meeting between the leaders of the 2 countries is going to be closely monitored.

Thursday, US Commerce Secretary Wilbur Ross said that countries were likely to get a framework for a deal at the G-20 meeting. But that could have a huge impact on the US and Chinese stock markets.

We see markets rallying into the end of the year and that trade tensions will ease. President Trump will need to do what is in his power to keep the economy rolling , drop the trade dispute and turn it into a winning deal.

Analysts at Morgan Stanley see room for agreement between the countries on major issues including intellectual property rights and US access to Chinese markets.

A positive US-China statement or a tariff pause are rising possibilities.

Friday, the US major stock market indexes finished at: DJIA +122.95 at 25412.22, NAS Comp -11.16 at 7248.08, S&P 500 +6.07 at 2736.41

Volume: Trade on the NYSE came in at 1.1-B/shares exchanged

  • NAS Comp +5.0% YTD
  • DJIA +2.8% YTD
  • S&P 500 +2.3% YTD
  • Russell 2000 -0.5% YTD

HeffX-LTN’s US Major Stock Market Indexes Technical Analysis for the Weekend Ended 16 November 2018

Date Symbol Price Technical Analysis Support Resistance
16 November 2018 QQQ 166.71 Bearish (-0.35) 162.80 169.49
16 November 2018 DIA 254.12 Bearish (-0.27) 251.54 255.00
16 November 2018 SPY 273.64 Bearish (-0.41) 269.57 273.74

Have a terrific weekend.

The following two tabs change content below.

Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

You must be logged in to post comments :  
CONNECT WITH