Winning Streak Continues, Stocks Up Four Weeks In A Row

Stocks surged yet again on Friday, and closed sharply higher for the week. That now makes it 4 up weeks in a row. And that's the first 4-week winning streak since August of last year.

Stocks have been on fire since the lows were made in late December.

Trade fears weighed on stocks last year. And they are still an issue today. But the growing optimism that a U.S.-China trade deal will get done, has fueled a remarkable rally.

In fact, a report last Thursday that the U.S. was considering lowering some tariffs on China during the continued trade negotiations energized the market. And then on Friday, a report that China offered to ramp up U.S. import purchases by more than $1 trillion over the next 6 years, effectively reducing the trade deficit to zero, sent stocks soaring even more.

Both stories were short of details. But it definitely shows a desire from both sides to put the trade dispute behind them once and for all.

After a U.S. delegation flew to Beijing for trade talks earlier this month, a Chinese delegation will be flying to the U.S. later this month to continue the talks.

The deadline for a trade deal is February 28th. So there's no time to waste.

In other news, Industrial Production rose 0.3% m/m as expected, while manufacturing gained an outsized 1.1%. The y/y gains however show just how strong industrial production has been, gaining 4.0% in 2018, vs. 2.9% in 2017, and just 0.5% in 2016.

And earnings season, even though it's really just begun, has gotten off to a great start.

The markets are closed today for Martin Luther King Jr. day.

But trading resumes tomorrow.

Looking forward to another positive week.

Best,

Kevin Matras

Executive Vice President, Zacks Investment Research

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