Stocks Up, Earnings And Jobs In The Spotlight This Week  Stocks closed higher yesterday after the administration downplayed last week's report that the U.S. was considering limiting investment into China.
On Friday, that report pulled stocks off of their intraday highs to finish in the red.
Limiting investment into China, it was reported, could include delisting Chinese companies from U.S. stock exchanges; restricting U.S. government pension funds from investing in Chinese companies; and limiting U.S. managed indexes' exposure to Chinese companies as well.
And while the report noted that the topic was in the very early stages of discussion, the market's reaction to the report was quick and unequivocal – it was a bad idea. And for the record, it would be disastrous for China.
That's why some felt this might simply be a negotiating tactic by the WH ahead of October's trade talks. While both countries want to make a deal, you can be sure they are each trying to exert as much leverage and pressure on the other as possible.
Regardless, the markets seemed relieved to hear that this was not something anybody was currently considering, which means the market doesn't need to worry about this anytime soon.
In other news, the markets are getting ready for earnings season. While it has already unofficially begun, it doesn't officially start until October 16th, when Alcoa reports after the close. Since stocks typically go up during earnings season, it's easy to see why there's plenty of excitement.
Traders are also getting ready for Friday's always important Employment Situation Report. While unemployment remains near record lows, it's one of those key metrics that the market likes to use as a barometer for the health of the economy. And it is often a market mover.
In the meantime, the reports on deck for today are retail sales via the Redbook report; the PMI Manufacturing Index; the ISM Manufacturing Index; and Construction Spending.
Of course, the main event that everybody is really waiting for is what happens at the U.S.-China trade talks, which starts on October 10th, in Washington, DC.
Expectations for a full-blown trade deal are low. But there's growing optimism that a partial deal or at least a 'trade truce' could be seen. And that could send the market soaring.
We'll all have to wait and see. But the strength of the economy alone should be enough to send stocks higher.
So it should come as no surprise why stocks remain within striking distance of their all-time highs, and poised to go even higher.
As I've been saying, these are historic times for the economy and the market.
So make sure you're taking full advantage of it.
See you tomorrow, 
Kevin Matras Executive Vice President, Zacks Investment Research |
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