July 13, 2018. The headlines pulling traders and investors in every which direction are getting, simply put, tiresome. After Wednesday’s panic about the imposition of new tariffs in the amount of $200 billion, the markets changed directions and rallied to a 2-week high after trade war concerns tapered. The S&P 500 halted 2 points beneath the 2,800 point level after recording 0.87% gains, the NASDAQ soaring 1.39%. The NASDAQ was on fire, led higher by tech stocks, with Amazon (AMZN), Google (GOOGL) and Facebook (FB) at their helm. All of these stocks broke up significantly, to new historic highs, each and every one surging over 2%.
The good news from the trade war front is that Beijing engaged in a more tempered response to Trump’s threats. That means that there’s a chance that we’ll see discussions along the way, and perhaps even concessions from China. We’re sure that the top echelons in China are concerned about an economic slowdown, a bear market and a weak currency, which means that it would indeed make sense for China to sign a deal.
The U.S. market has begun to heat up again. It’s beautiful to see the bulls looking to buy in despite the headlines about Trump’s ongoing trade war threats. Apparently, market players, when push comes to shove, expect a good resolution to the trade reprisals. In the event that that’s what we get, we expect the market to break out to an all-time high before the end of the year. If we can make it through this coming weekend without negative news, we could very well see a nice move higher during the earnings season which comes into focus this coming week. Despite the stock market rally, crude suffered again, recording a decline to the $69.23 barrel level.
Leading up to the earnings season, analysts expect S&P 500 earnings to soar over 19% year-over-year, with a rise of 8.2% in revenues. If that feat is achieved, that would be the third straight quarter with double-digit earnings growth.
Continuity, though, has been the thorn in the market’s side of late, so frankly put, it’s impossible to know what will happen today. After Wednesday’s declines, yesterday’s gains were certainly healthy, the trend looking positive. Banks, today, will be in the spotlight for traders, with the release of reports from PNC, C, WFC, and JPM.
Have a great trading day!
Today’s Picks – Day Trading!