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Where will the stocks go? Everything is related to trade



Investors have greatly celebrated the latest hints of progress in ending the worsening trade war. The news, which indicates positive changes in the talks, led to Dow 500 points higher in the last two trading days last week.

The enthusiastic response to the stock market highlights how badly investors want to end this trade struggle between the two most important economies in the world.

"The trade war and the weapons used in it create distortions in the economy," said Mike Loewengart, head of investment strategy at E * Trade. "It has the potential to hinder global growth."

Evidence of a real breakthrough in trade talks could boost stocks. US stocks surfaced Thursday afternoon following the Wall Street Journal report that Trump officials are considering whether to raise tariffs for China. The rally was losing steam when investors realized that nothing was formally decided ̵

1; and the Treasury issued a statement that cuts the story.

The market came back on Friday after Bloomberg News reported that China has proposed a six-year "purchase" of US products aimed at balancing its trade surplus by 2024 [3] last week, their fourth consecutive weekly profit.

"The optimism of the last few days shows that it really comes down to this trade war," said Lawwagen.

This means that investors will be disappointed if trade negotiations collapse. Violation of negotiations and the outbreak of tariffs will only exacerbate ongoing concerns about the sharp slowdown in economic growth that stifles corporate profits.
Obviously, investors will be glued to high-level trade talks scheduled for January 30 in Washington, between US officials.

Both sides face a deadline of March 1 [19659012]. It seems unlikely that negotiators will resolve the deep structural issues that have hurt the rival nations until then – if at all. However, analysts are increasingly saying the bargaining window will be extended.

Michael Herson, Asia's director of the Eurasian group, believes the "limited deal" is "more likely" in the coming months because President Donald Trump wants to calm investors and boost the economy before the 2020 elections [19659003] However, trade peace may not be such as to satisfy Chinese hawks in the White House.

"This will be an unstable and incomplete truce, a deal that far does not address the deep questions between the two countries and economies," Hirson wrote in a report published late last week

While a wider resolution would be "ideal," the market will be pleased with everything that pushes the US and China off the brink.

"Any growing progress in finding an agreement will be perceived by investors," he said.

2. Davos: [19599007] The annual meeting of the World Economic Forum begins on Tuesday in Davos, Switzerland. Every year, the event attracts thousands of the richest and most powerful people in the world who meet and talk at fairs in the European ski resort

US President Donald Trump said he will not attend Davos this year because of the government's exclusion. British Prime Minister Teresa May canceled her trip in the midst of Brexit's confusion and French President Emanuel Macron will also skip the event this year. But many other high-ranking individuals are planning to be there, including German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe. The theme for 2019 is "Globalization 4.0"

3. The Revenue Season: Last week, it was all about US banks' revenue. It is now time for other companies to report on the results of the last three months of 2018

One of the topics this week could be the impact of the slowing Chinese economy. Investors will closely monitor the results of Wynn Resorts (WYNN), Ford (F) and Starbucks (SBUX), which have a solid exposure to the Chinese market.
The big question is whether the problems identified by Apple (AAPL) are widening. Earlier this month, CEO Tim Cook said the company would miss its last target mainly due to poor sales in China. 4. Economic Indicators: Against the backdrop of growing economic uncertainty, two major central banks will decide on interest rates this week: the Bank of Japan and the European Central Bank.

Any action would be a surprise. In Japan, short-term interest rates are in negative territory since 2016. Meanwhile, the ECB promised to keep interest rates in the summer of 2019. The bank wants to avoid strong volatility after the end of its mass program to buy bonds in December. 19659003] China will also report its GDP in the last quarter of 2018. The country's last quarter saw its weakest quarterly growth since the depths of the global financial crisis. Market observers will want to know if the trade war with the United States continues to have a major impact. Economic obscurity: The eclipse of some important economic data goes on this week when the government closes in the fifth week. US reports are a gold standard and business leaders use them to plan investments and direct companies. The upcoming week will include these three from the Sales Department: New Resale of Residential Buildings and Revised Building Permits (Friday); (19459010) – Wynn Resorts earnings, China's gross domestic product (GDP), gross domestic product (Thursday)

6. Fourth Quarter

Tuesday – The World Economic Forum begins; Stanley Black & Decker (SWK), Johnson & Johnson (JNJ), Travelers (TRV), IBM (IBM), and Capital One (COF) Wednesday Comcast (CMCSA), Procter & Gamble (PG) and Ford's profit
Thursday – ECB Decision on Tariffs; The revenues of Colgate-Palmolive (CL) and Royal Caribbean Cruises (RCL)

Friday earnings of Southwest Airlines (LUV), American Airlines (AAL), Starbucks and Intel (INTC)
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