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Plus New Zacks Strong Buys for Thursday, January 16
Kevin Matras   
Profit from the Pros
By Kevin Matras
Executive Vice President
Zacks Investment Research
  

Phase 1 U.S.-China Trade Deal Is Official, Attention Turns To Earnings Season

Stocks closed modestly higher yesterday, but not before the Dow and the S&P hit new all-time highs.

The markets cheered the signing of Phase 1 of the U.S.-China trade deal. After two years of sometimes contentious negotiations, it was finally made official yesterday.

Estimates suggest the agreement could add as much as a half percent to our GDP this year and next.

Phase 2 negotiations are expected to begin shortly. While that's not likely to be completed until after November, the incentive to China is the talked about removal of the $250 billion in tariffs that will remain in place until then.

In the meantime, with a reduction of some tariffs as a result of Phase 1, and an abrogation of others, a lot of the uncertainty has been removed, and a wave of new growth should follow.

Next up is a vote in the Senate on USMCA. That's expected to pass by week's end. While the U.S.-China trade deal is important (China is our third largest trading partner), the USMCA trade deal with Canada and Mexico (our two largest trading partners with the U.S. exporting 5 times as much to those countries than to China), is pretty important as well. And the boost to our economy could be even greater.

It's been a great start to the year so far.

And it looks like it could get even better with the official start of earnings season having just begun.

Since stocks typically go up during earnings season, that's adding even more excitement to the market. And it's not uncommon to see individual stocks soar 10%, 15%, or even 20% or more in one day after an earnings report.

The key is getting into the right stocks.

If you want to learn how to potentially find big winners this earnings season BEFORE they report, be sure to read our latest commentary...

Best Way to Make Money on Earnings Surprises

Best,

Kevin Matras

Executive Vice President, Zacks Investment Research

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