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Technically Speaking For December 3: 2019 Looks Challenging

Dec. 03, 2018 5:41 PM ETSPY, QQQ2 Comments
Hale Stewart profile picture
Hale Stewart


  • There is good news on the trade war front.
  • The Fed is becoming more dovish; the latest Markit PMI numbers were positive but weak.
  • 2019 looks challenging for the markets.

There's good news on the trade war front. Canada, the U.S., and Mexico have signed the new tripartite agreement. The deal must now get through Congress, which, according to analysts, will be much more difficult with the Dems in charge. China and the U.S. have agreed to a three-month moratorium on additional trade sanctions while they attempt to negotiate a new relationship:

The United States and China called a truce in their trade war on Saturday after President Trump agreed to hold off on new tariffs and President Xi Jinping pledged to increase Chinese purchases of American products. The two also set the stage for more painstaking negotiations to resolve deeply rooted differences over trade.

I'm very skeptical that anything major can be accomplished in a mere three months. The Trump administration's complaints go right to the heart of the U.S.-Chinese relationship; it's difficult to see any major change occur in 90 days. Still, this news should please the markets.

The latest Fed Meeting Minutes show a more dovish tone [emphasis added].

However, a few participants, while viewing further gradual increases in the target range of the federal funds rate as likely to be appropriate, expressed uncertainty about the timing of such increases. A couple of participants noted that the federal funds rate might currently be near its neutral level and that further increases in the federal funds rate could unduly slow the expansion of economic activity and put downward pressure on inflation and inflation expectations.

Monetary policy was not on a preset course; if incoming information prompted meaningful reassessments of the economic outlook and attendant risks, either to the upside or the downside, their policy outlook would change. Various factors such as the recent tightening in financial conditions, risks in the global outlook, and some signs of slowing in interest-sensitive sectors

This article was written by

Hale Stewart profile picture
Hale Stewart spent 5 years as a bond broker in the late 1990s before returning to law school in the early 2000s. He is currently a tax lawyer in Houston, Texas. He has an LLM in domestic and international taxation (MagnaCumLaude). He is the author of the book The Lifetime Income Security Solution. Follow me on Twitter at @originalbonddadYou can read his legal analysis on his law office's blog.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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