The Good News Keeps Coming And Stocks Keep Rallying

Another solid day for the market yesterday.

Continued optimism that a budget deal will get signed by Friday night's deadline and avert a shutdown helped buoy stocks.

And increasing optimism that the U.S. and China will strike a trade deal by month's end is also fueling this rally.

This was underscored by reports yesterday that President Xi will meet with U.S. Treasury Secretary Steve Mnuchin, and U.S. Trade Representative Robert Lighthizer in Beijing this week.

Don't expect a breakthrough announcement this weekend. The deadline isn't until March 1st. But every successful step forward gets us one more step closer to an agreement.

The U.S. would love to see a trade agreement. It would bolster our already strong economy.

And China would also love to see a deal. Their stock market fell into a bear market last year. Their economy has been on a downward trajectory. And they have a black eye on the world stage with accusations of spying thru some of their multinational companies, like Huawei. And while the Huawei spying issue is officially a separate issue from the trade talks, a trade deal with the U.S. would be a great way for them to change the conversation from spying and theft to now showcasing their 'newfound cooperation', not to mention help rev up their economy.

Quite frankly, the whole world will cheer a deal between the two largest economies.

And it should set the stage for new highs in the stock market.

But it appears that savvy traders aren't waiting for the official announcement (if and when it happens). They have been racing back into the market ever since we bottomed late last year.

This goes for professionals and insiders as well.

In fact, I love watching what the insiders are doing. These are typically the officers of a company that have to declare their buying and selling within a few days of their transactions.

While it's true that an officer may have a myriad of reasons to sell their company stock, there's really only one reason to buy it, and that's to make money because they think the stock will go up.

My favorite type of insider buying, aside from the unusually large purchase from someone high up in the company, is the clustered buy, where a large number of officers are making meaningful purchases at the same time. That can often be an indication that these employees know some positive development at the company, and they are anxious to get in before the stock moves up because of it.

If you'd like to learn how this type of insider trading could give you an edge in today's market, be sure to read our latest commentary...

You Won't Believe What Stocks The Insiders Are Buying

Best,

Kevin Matras

Executive Vice President, Zacks Investment Research

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