Trading Resumes As Stocks Look To Extend Their Winning Streak

With the U.S. markets closed for Martin Luther King Jr. Day yesterday, today marks the beginning of the trading week, after stocks extended their winning streak to four weeks in a row.

Optimism over continuing trade talks between the U.S. and China have helped fuel this recent rally. Not to mention a robust economy, record employment, and a better than expected start to earnings season.

On a cautious note, China announced over the weekend that their economy grew by 6.6% last year, the slowest pace in 28 years. But for context, 2017 was 'only' 6.9%, so the decrease is pretty miniscule. And for the record, their economy has been steadily declining since 2007 when they reported a 14.2% GDP. So this is hardly a surprise. And 6.6% is still one of the fastest growing economies in the world.

And yesterday, the IMF reduced their global growth forecast from 3.7% to 3.5%, citing weakness in Germany and Turkey. But again, it's a relatively small reduction. And the key word in all of this is still 'growth'.

They acknowledged that worsening trade tensions between the U.S. and China could reduce growth even more. But that's old news.

And there definitely seems to be sufficient motivation on both sides to finally get a long-awaited deal done.

Earnings season resumes in earnest with another 74 companies reporting today, and 374 total for the week.

If stocks can keep their winning streak alive this week, it will be 5 weeks in a row.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

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