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Trade Concerns Weigh On Stocks As Deadline Approaches
Stocks closed lower yesterday as trade concerns weighed on the markets.
Shares have been flying high for the last 7 weeks as traders raced back into stocks.
One of the reasons why was increased optimism that a trade deal with China would get done.
Things are still looking good on that front. But a report yesterday that President Trump and President Xi would not be meeting before the March 1st deadline became a source of worry for the market.
Several weeks ago it was reported that plans were being made for both leaders to meet before the deadline. This sparked excitement in the market since the feeling was that they would only be planning to meet if they could emerge victorious with an official deal. The apparent cancellation of those meeting plans are now causing people to wonder if the talks are not going as well as had been hoped.
A U.S. trade delegation, led by Steve Mnuchin and Robert Lighthizer, is still headed to Beijing next week for a continuation of high level trade talks. And just the other day, Secretary Mnuchin said he was confident that the U.S. and China can work out a deal, saying "we are committed to continue these talks", "we're putting in an enormous amount of effort to hit this deadline and get a deal", and said they had "very productive meetings" when the Chinese delegation was in Washington at the end of January.
But as I wrote before, just know there's going to be both positive and negative news stories regarding trade talks as we approach the deadline. So try not to get caught up in the noise.
The market is still optimistic that an agreement will be reached.
If so, I'm expecting plenty more upside to come.
Just don't get rattled if we get a few down days along the way.
And I'd definitely be a buyer on the dips.
Best,
Kevin Matras
Executive Vice President, Zacks Investment Research
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Stocks closed lower yesterday as trade concerns weighed on the markets.
