A couple down days in the market does not make a trend and when taken into context of a “mini” seven week “melt-up,” perhaps a little pullback is needed. Nevertheless, we are in the last month of 2019 and everyone is wondering if there will be a Santa Claus rally or perhaps another scenario like last year. It’s too early to tell, but we’ll know more in a few short weeks’ time. Be mindful that December is historically known for being a month of poor liquidity and right now these markets only seem to be running off of the fumes from the massive liquidity injections from the Federal Reserve. So how much longer can this bull market run?
On the US/China trade front, talks appear to be stalling if not collapsing as President Trump claims that he would be fine with the deal not being finalized until after the 2020 election. Yes. Seriously. He also claims that he does not pay attention to the stock market. Yes. Seriously. However, he stated that the DOW would hit 30,000. So there’s that. There’s also the potential for the President to respond to France enacting a digital tax, which would affect US goods. President Trump could potentially slap tariffs on $2.4B worth of French goods – primarily wine, champagne, cheeses, and luxury retail lines. The French Finance Minister has already responded that if such tariffs are implemented, the French will respond in kind. So there’s that.
The Federal Reserve meets for the last time next week and is expected to keep rates on hold. However, with the recent setback in trade talks, the possibility of tariffs on French products, the tariffs placed on Brazilian and Argentine steel and aluminum, and the recent market pullback, is Trump trying to force the hand of the Fed to cut rates for the 4th time this year? Regardless what the Fed decides, Trump will blame them for something.
On the political front, Senator Kamala Harris suspends her campaign for President – surprise, surprise. And the impeachment inquiry makes its way to the House Judiciary Committee tomorrow with the first round of testimony. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #EndTheFed #Trade #Politics #Impeach #2020 #Truth #Justice #Peace #Protests #USA #China #HongKong #Recession