Stocks Up 3 Weeks In A Row, Expected Rate Cut This Week Could Extend Gains Even More

Stocks closed narrowly mixed on Friday, but sharply higher for the week, making it 3 weeks in a row of gains.

The major indexes are now within striking distance of their all-time highs.

And with the Fed meeting on Wednesday, and a rate cut all but a certainty, we could see stocks finally break out to new all-time highs.

But what traders really seem to be getting excited about, is the prospect of a U.S.-China trade deal.

Both countries have toned down their rhetoric, they've shown each other good will gestures, and they've extended olive branches to one another in hopes of creating an atmosphere that can usher in a long-awaited trade deal.

And while China appeared to walk away from some of the previously agreed upon provisions in the trade deal that was nearing completion earlier this year, the pressure on their economy has only gotten worse, and a trade agreement now would go a long way in helping them improve their economy.

Again, while few are expecting a full-blown trade deal when they meet again in October, there's plenty of hope that a lessening of tensions or a 'trade truce' can be seen. But given all of the above, there's growing optimism that just maybe a real deal can actually get done.

Either way, the market clearly likes what it sees.

We've got a strong GDP. Record employment. Near record consumer confidence. Record corporate profits. Low interest rates (and poised to go even lower). Household income is the best it's been in 20 years. And stocks are sitting near all-time highs.

This truly is an historic time for our economy and for the market.

This is history in the making.

And it looks like we'll be making even more history later this week.

So make sure you're taking full advantage of it.

See you tomorrow,

Kevin Matras

Executive Vice President, Zacks Investment Research

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