Keep The Momentum Going

Jake Keelen-Brown | jlb7226@psu.edu | February 13, 2019

On Wednesday, The Wall Street Journal reported on the recent confidence investors have in the stock market. Both the DOW and S&P are up at least 9.5% percent for the year which can be attributed to multiple factors for this upswing in prices.

First off many investors are expecting good news to come from the trade meeting this upcoming Friday with China’s President. President Trump has reiterated his stance that if progress is made he will consider pushing back the March 1st deadline for a trade agreement between the two countries. This is allowing stocks to continue to gain because of decreased fears of trade tensions.

Additionally, President Trump is expected to sign a border security bill that will end the speculation of another government shutdown. Even though, there is still the issue of a possible State Of Emergency, investors seem to be more at ease.

The most influential news for the market may arguably be from the Federal Reserve. Many District Presidents have come out and stated that they do not expect an increase in interest rate for the year of 2019. This is huge news as it gives investors a bullish view on the state of the economy without the worry of it slowing down or overheating.

For the year of 2019 I expect the U.S. economy to continue on the steady path upward. I predict that the meeting with China’s President will result in President Trump pushing the deadline back at least another 90 days until June 1st. This will allow investors the peace of mind not having to invest in the middle of a trade and tariff war.

The border will give Democrats the sense of victory until there is a State Of Emergency issued within the following weeks. President Trump will get the rest of the funding for the wall on the southern border as it is a major factor into whether he will get reelected next year. His base was built on the notation that a wall will be built and I believe his base must see progress so he is not labeled “another politician with false promises.”

Interest rates will stay at the “sweet spot” they are now for the entire year due to the fact the Federal Reserve sees this a utopian state. As long as the Fed does not sense signs of the economy becoming excessive there is no need for change at the moment.

However, as we all know unseen circumstances could arise at any time. For now, investors must ride this wave of positive activity for as long as they can before something scares them off.

Sources:

https://www.wsj.com/articles/u-s-china-trade-optimism-drives-stocks-higher-11550048127