I don’t believe the headline narrative is accurately capturing traders' concerns. In fact the slowdown has been widely anticipated and is, at this juncture, simply a slowing of the growth rate, and is not flashing legitimate recession warnings. Thus, this is actually good overall near-term stock market news, as it’ll stay the hands of central banks, which has been a concern of traders to this point.
The angst in my view is clearly around the mixed signals related to U.S./China trade talks, concerns over the prospects for ultimately a viable deal, and the reality that the government shutdown is beginning to do a number on the U.S. economy, and it gets worse every day it continues.
This is the stuff of huge stock market rallies: The shutdown is of course the definition of temporary phenomena; any resulting economic slowdown, barring the emergence of macro recessionary conditions in the meantime, will see a correcting surge in future quarter(s). The inking of a U.S./China trade deal (hugely in the political best interest of the parties, and the economic best interest of the world) – outside of recessionary conditions – stands to be substantially bullish for equities as well.
In the meantime, technically-driven analysts still expect a test of the 12/24 low; which is the norm for similar corrections past. As I type the S&P is dancing right on 2630 support (resistance?)...
The angst in my view is clearly around the mixed signals related to U.S./China trade talks, concerns over the prospects for ultimately a viable deal, and the reality that the government shutdown is beginning to do a number on the U.S. economy, and it gets worse every day it continues.
This is the stuff of huge stock market rallies: The shutdown is of course the definition of temporary phenomena; any resulting economic slowdown, barring the emergence of macro recessionary conditions in the meantime, will see a correcting surge in future quarter(s). The inking of a U.S./China trade deal (hugely in the political best interest of the parties, and the economic best interest of the world) – outside of recessionary conditions – stands to be substantially bullish for equities as well.
In the meantime, technically-driven analysts still expect a test of the 12/24 low; which is the norm for similar corrections past. As I type the S&P is dancing right on 2630 support (resistance?)...
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