Stocks On Pace To Close Higher For The Week

Stocks closed nicely higher yesterday, and are on pace for a positive week this week.

Traders await news regarding the high-level trade talks in Beijing that began yesterday and conclude today. Then China heads back to the U.S. for more talks next week. The expectation for the talks to finally wrap up with the desired trade deal in place has shifted from March 1st, to mid-March, then to April, and now possibly to June. Either way, both parties continue to cite progress, yet acknowledge sticking points, hence the additional time.

But as it's been said, "Trade negotiations that are good and serious take longer than people want or predict. This one's taking longer than people want or predict." This came from Tim Keeler, a former Bush administration official who worked on U.S trade.

Yet maybe we won't have to wait until June. Max Baucus, a former U.S. ambassador to China said, "The talks have to conclude. They have to. U.S., China, we're so closely joined at the hip economically, we got to get this thing done. There's some feeling here, maybe by the end of April, maybe a little longer, but we'll get it done."

And that's what the market is expecting – that they'll get it done.

In other news, it was confirmed yesterday that Q4 '18 GDP came in at 2.2% as expected. Consumer spending and business investment, in particular, were two standout performers.

Weekly Jobless Claims fell again with -5,000 fewer new claims at 211,000 vs. estimates for 225K. It was noted that this was the best showing since the beginning of the year. And it's close to being back at the best readings of this historic expansion.

Corporate Profits rose to an 11.1% y/y gain. This compares to last month's snapshot of 6.1%.

And the Kansas City Fed Manufacturing Index jumped to 10 from last month's reading of 1. The report noted the continued strength in employment, and the recent gains in production and shipments.

The market looks strong. And looks poised for another upside breakout.

Best,

Kevin Matras