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Stocks Up 8 Weeks In A Row, Growing Optimism Over U.S.-China Trade Talks

Stocks soared on Friday and for the week, with the Dow, Nasdaq, and Russell 2000 Index extending their winning streak to 8 weeks in a row.

The market had been cheering the prospect of a budget deal all week, and it was made official on Friday after President Trump signed it into law. While the declaration of a national emergency raises new uncertainties, it should have no impact on the market.

Traders have also been cheering the progress of the U.S.-China trade talks. China's President Xi joined U.S. Treasury Secretary Steve Mnuchin, and U.S. Trade Representative Robert Lighthizer in Beijing last week for high level talks. And a Chinese delegation will be arriving in the U.S. this week for a continuation of those talks, with both sides hoping to reach a memorandum of understanding.

The deadline for a deal is March 1st. But President Trump has already said that he'd be willing to extend the deadline for raising tariffs "if we're close to a deal."

The continuation of the negotiations this week, and President Trump's comment that he expects to meet with President Xi soon, suggests to me that they indeed are getting closer. There's still plenty of work to be done. But both sides have characterized the talks as productive.

In other news, Friday's Empire State Manufacturing Survey increased to 8.8 from last month's 7.6. It was noted that this reading was 'very positive' and points to 'solid and sustainable growth.'

And Consumer Sentiment came in at a strong 95.5, beating last month's 91.2 and views for 93.0. Both the current conditions component and the expectations component saw gains.

Traders will be listening for any news on how the continued trade talks are going this week.

And if we get more good news, we could see stocks extend their winning streak to 9 weeks in a row.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

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