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Stocks Down For The Week On Continued Trade Worries

Stocks closed down on Friday and down for the week. After Thursday's dramatic rebound, Friday's sell-off was particularly disappointing.

Trade concerns continue to weigh on the market. Until more details of the U.S.-China trade truce are released, or until China actually starts buying some of the goods they reportedly will be purchasing as a result of the truce, the market is likely to remain on edge.

Additionally, the uncertainty surrounding the arrest of China's Huawei CFO, Wanzhou Meng, and how that will impact the trade talks is only adding to the uneasiness.

Friday's Employment Situation Report didn't help the markets much either. It was a fine report with 155,000 new jobs being created last month (161,000 in the private sector and -6,000 in the public sector). But expectations were calling for 190,000. At first, the market ran up on the news. Especially since the lighter number would give the Fed the opportunity to slow their pace of interest rate hikes.

The slower pace of interest rate hikes was met with cheers on Thursday. But not on Friday. Additional comments from the Fed, namely James Bullard, who suggested they might skip hiking rates in December, raised fears that the economy might be slowing down more than expected and that the Fed may have already gone too far too fast.

There was a lot of news to digest on Friday and for the week. But when it comes right down to it, it's the uncertainty over tariffs and trade with China that continues to weigh on the market.

Here's hoping the next 90 days of trade talks are productive and lead to an agreement. Because it can't get here soon enough!

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research


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