Confidence Boosters for the Market

by Laura Ehrenberg-Chesler on January 28, 2019

in Earnings,Economic Indicators,equity market,Fed policy,Foreign Markets,Geopolitical,interest rates

For the fourth quarter of 2018, and into the month of January 2019, the market has been worried about slowing growth and the possibility of a recession. Earnings reports have been mixed, with several large multi-nationals reporting disappointing numbers. Ed Yardeni articulates a few things that could bolster the confidence of the market over the next few months, as well as boost growth prospects for the remainder of the year.

1. The Federal Reserve takes “QT” or Quantitative Tightening off autopilot. This means that the Federal Reserve will be more attuned to economic data, rather than continuing to raise rates regardless of slowing growth.

2. Ending the trade war with China. The March 1st deadline for a China deal is approaching rapidly. If we can get a substantive deal done before that date, it would be a big relief to investors.

3. Reopening the government. While the shutdown ended temporarily on Friday, a more permanent solution to immigration and boarder security would go a long way to providing stability to the equity markets, and would prevent the chaos or perceived chaos of having the government partially operational.

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