Last week, three weeks in a row of market gains!  Are we out of the woods or should buyers beware?

Data last week was meaningful to the landscape of the US economy for a few reasons. Trade talks with China took place in the early half of the week. The outcome of which could impact the outlook for global growth in 2019. Also, Federal Reserve Bank (FRB) board members spoke at events across the nation. Every word is typically scrutinized for potential policy moves and last week was no different.

China

Talks with China moved us closer to a deal being completed. The pressure on both China and the US has never been higher. China is trying to temper slowing growth. While 2018 GDP was 6.5%, they are expected to announce a target of between 6% and 6.5% for 2019. The US has suffered a bear market in response to trade concerns. US Markets shed 20% or more between October and December.

FRB

FRB Chair Powell and FRB board governors spoke last week at separate events all with a similar message. The FRB is open to moving ahead cautiously. The overwhelming hope is for a short-term pause to rate hikes. The next hike would likely not occur until early summer in that scenario.

Both of these items are good news to future prospects of continued expansion. Corporate earnings would show increases due to reduced tariffs. Slower acceleration means bonds rates could potentially avoid a dent from increased growth expectations.

A word of caution still exists, however. A trade deal is not done, and the FRB will likely still raise rates twice this year. Of course, Brexit continues to loom over markets. Also, the government shutdown is moving into a phase that will impact economic production. As of this past Friday, pay checks for government employees were missed. So while last week brought optimism, there is still much to be leery of.

Your interest in our articles helps us reach more people.  To show your appreciation for this post, please “like” the article on one of the links below:

Facebook | Twitter | LinkedIn | Google+

FOR MORE INFORMATION:

If you would like to receive this weekly article and other timely information follow us, here.

Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long-term holding strategy is the best strategy in any market environment.

Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.