Stocks Rebound After Trade And Political Concerns Around The World Weigh On Markets

Stocks closed higher on the day after plunging in the morning.

Trade concerns continue to weigh on the market.

But political concerns around the world are further unnerving investors.

Stocks sold off as U.K. Prime Minister, Theresa May, addressed Parliament yesterday where she postponed the doomed Brexit-deal vote. Her very leadership is now being called into question.

And the President of France, Emmanuel Macron, addressed his country yesterday after weeks of rioting forced him to rescind his proposed fuel tax and make concessions to protesters and opposition parties. Analysts are saying that Q4 GDP forecasts for France will be cut in half because of the riots, the destruction of property, and the negative impact on tourism.

We also cannot overlook the political headwinds at home. The most urgent one being the budget deadline on December 21st, and the real possibility that the government shuts down over immigration and border wall funding.

Throw in the ongoing saga over the arrest of China's Huawei CFO, Wanzhou Meng. And the peculiar timing of China's sales ban on older Apple iPhones (which many think is a tit for tat retaliation for Meng's arrest), and you can see there's plenty of hurdles for the market to overcome.

Fortunately, the strength of the economy remains intact, as does our historic jobs market.

The problems in London and Paris are unlikely to be resolved anytime soon. But once we can get past the U.S. budget deadline, and come to an agreement with China on trade, stocks are likely to shine once again.

And many are still expecting double-digit market gains next year.

In the meantime, there are lots of great stocks out there. And bargains. But this has definitely become a stock picker's market for the time being.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

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